Support Grows for Universal Charitable Deduction

Let’s just keep it real. The charitable deduction is not a sexy topic, and Independent Sector is very aware that advocacy for the charitable deduction in the U.S. tax code rarely gets the attention it deserves.

Coming into 2017, IS knew that we’d need to think differently about the charitable deduction, a powerful tax incentive that encourages people to give more to charity than they otherwise would. As a new Administration came to Washington, we knew they, like many before them, would attempt to tackle comprehensive tax reform. We also knew that Republicans, now in control of Congress, would likely support policy proposals that might have unintended consequences to giving.

So, IS started working with sector infrastructure groups such as the Council on Foundations, the National Council of Nonprofits, Philanthropy Roundtable, United Philanthropy Forum, and coalitions like Faith in Giving and Charitable Giving Coalition. Over several months, a consensus emerged to begin speaking with our Congressional representatives and Administration leaders about expanding the charitable deduction to 100 percent of taxpayers.

So what’s the deal with the charitable deduction, really?

Well, we knew most people would have this question. So IS launched to help educate the sector and others about the importance of this uniquely American tax incentive.

Watch the explainer video that was central to this campaign:

What do current proposals mean for charitable giving?

We wondered that ourselves, so we commissioned some research and worked with the Indiana University Lilly Family School of Philanthropy to find out what two proposals would do to charitable giving. What we found out included some bad news and good news. The bad news was that provisions in current proposals from Congressional Republicans and the Trump Administration has the unintended consequence of reducing charitable giving by as much as $13 billion a year. The good news was that when a charitable deduction was extended to 100 percent of taxpayers, giving actually increased by as much as $4.8 billion a year. With that research in the field, we saw an uptick in support from the sector and lawmakers alike.

What’s happening now?

Our government relations team has had have had regular meetings and communications with key leaders and staff on the House Ways and Means and Senate Finance committees, two bodies responsible for writing tax legislation in Congress. Notably, in early July, IS President and CEO Dan Cardinali — along with Gail McGovern of American Red Cross, Brian Gallagher of United Way Worldwide, and Kevin Murphy of Burkes County Community Foundation and Council on Foundations — met with Chairman of the House Ways and Means Committee, Kevin Brady (R-TX). In the meeting with Chairman Brady, Dan spoke of the need to protect and expand the charitable deduction and protect the Johnson Amendment. We were also pleased to learn that one of our partners, Philanthropy Roundtable, was able to make expanding the charitable deduction a key part of their listening session with Vice President Mike Pence. You can read more about these recent efforts in The Hill and The Chronicle of Philanthropy.

Last year at the IS Conference in Washington, DC, we asked sector leaders who attended what they thought we should be telling Congress and the new Administration about the sector, the people who work and volunteer in it, and the people and missions we all serve each day. That’s been our guiding principle in shaping how we’re approaching our work and the issues that we collectively work on with other cross-sector organizations.

Whether it is our push for the universal charitable deduction, our statement on the Administration’s budget outline, or our support for the Johnson Amendment, we hope that you learn more about these public policy issues shaping the sector. Cross-sector public policy work may not be sexy, but we’re trying to make it more accessible because, at the end of the day, it is very important. If you want to learn more, download our podcast, 100 Days for Good, where we try to demystify the policy topics with a dash of humor and some inspirational haikus.


Types: Blog, Policy Update
Global Topics: Administration, Congress, IS Staff, Public Policy
Policy Issues: Charitable Deduction, Charitable Giving, Tax & Fiscal Policy