WASHINGTON – Today, Senators Mike Lee (R-Utah), Chris Coons (D-Del.), James Lankford (R-Okla.), Jeanne Shaheen (D-N.H.), Tim Scott (R-S.C.), Amy Klobuchar (D-Minn.), Susan Collins (R-Maine), and Catherine Cortez Masto (D-Nev.) introduced the Universal Giving Pandemic Response and Recovery Act, a bipartisan proposal to extend and expand the universal charitable deduction. The bill would ensure that Americans who donate to non-profits such as charitable and religious organizations are able to deduct their giving from their federal tax liability at a higher level than the $300 deduction instituted temporarily through two of the COVID-19 relief packages.
More specifically, the Universal Giving Pandemic Response and Recovery Act would empower Americans who do not itemize on their tax returns to exclude a larger amount of their charitable giving from their taxable income—up to one-third the value of the standard deduction (which is about $4,000 for individuals and $8,000 for married couples filing jointly). This effort is in the same spirit as Senator Lee’s Social Capital Project within the Joint Economic Committee, which is focused on the importance of our associational life, enabled through institutions like churches, charities, and community partnerships. In fact, a 2019 report from the committee recommended a similar reform to help renew America’s voluntary institutions.
“Nonprofits fill the most acute needs in our communities, surpassing governmental efforts in responsiveness, dollar-for-dollar return on investment, and targeting acute and changing needs,” said Senator Lee. “During the pandemic, churches, charities, and community organizations have creatively met immense need in their neighborhoods, despite reports that many sources of donations have disappeared or decreased significantly.
“Last year, our bipartisan coalition paved the way for the creation of a charitable deduction for all American taxpayers. This year, we are again calling on Congress to increase that deduction to more than $4,000 for individuals and $8,000 for married couples. The charitable deduction has long embodied the insight that individuals should not be taxed on money they choose to give away. That maxim should hold irrespective of an individual’s total income,” Lee concluded.
The bill is supported by many nonprofits, including: National Council of Nonprofits, Charitable Giving Coalition, The Philanthropy Roundtable, Faith and Giving Coalition, United Way Worldwide, National Philanthropic Trust, Association of Art Museum Directors, The Nonprofit Alliance, Council for Advancement and Support of Education, Alliance for Strong Families and Communities, American Red Cross, National Association of Evangelicals, Philanthropy Southwest, Council on Foundations, and Independent Sector.
Here’s what Utah supporters are saying:
“The proposed Universal Giving Pandemic Response Act is a critical piece of legislation that can have an immediate impact on our nonprofit ecosystem,” said Jill Remington Love, Executive Director, Utah Department of Heritage and Arts. “Coupled with the 2017 tax reforms, the pandemic and economic downturn over the past year have significantly reduced charitable giving at a time when demand for services has increased exponentially. Nonprofits urgently need additional resources to serve those most impacted through this current crisis. Independent Sector-commissioned research indicates that the proposed legislation could unlock billions in new giving, providing a lifeline for struggling charities. Thank you to the bi-partisan sponsors for working together to champion this important issue.”
“Nonprofit organizations have, for years, been the bedrock of support and inspiration within our communities. We know that since 2017 the share of taxpayers who itemize (thus receiving an incentive for their charitable giving) has declined to approximately 10%. Additionally, the global pandemic has exacerbated an already fragile system where the needs of our communities are out pacing the availability of government and business support. Overall, this combination presents a challenge for Utah’s nonprofits because while giving and revenues have decreased the demand for services has increased,” said Kate Rubalcava, Chief Executive Officer, Utah Nonprofits Association. “A universal charitable giving incentive is a solid and worthy solution that not only benefits nonprofits, it also benefits communities and governments because nonprofits will have increased resources (from the community) fueling their mission critical work.”