This year’s alarming Giving USA report has rightfully ignited concern among charities that rely on private giving. The report found that total charitable giving declined by 10.5 percent in 2022 when adjusted for inflation (a 3.4 percent decline in current dollars), marking only the fourth year in nearly 70 years that charitable giving declined in current dollars.

Coupled with the troubling trend of fewer Americans giving to charity, this data demands action if we are to have any hope of reversing the decline in giving and donors. Fortunately, there is a policy proposal that has demonstrated an ability to help address both trends – a universal charitable tax deduction available to the more than 90 percent of taxpayers who don’t itemize their taxes.

According to preliminary Internal Revenue Service (IRS) data for tax year 2021, 47 million households used the temporary universal charitable deduction for donations totaling around $18 billion. Keep in mind that the temporary universal charitable deduction was capped at $300 for individuals and $600 for joint filers. A higher cap would encourage even more giving to nonprofits across the country.

The Charitable Giving Coalition, along with hundreds of other sector organizations, has advocated for a universal charitable deduction for non-itemizers since 2016. The recently introduced, bipartisan Charitable Act (H.R. 3435, S. 566) would bring back the universal charitable deduction for this year and next with an increased cap of one-third of the standard deduction (roughly $4,600 for individuals and $9,200 for joint filers), and it’s supported by a broad cross-section of the charitable sector and lawmakers with diverse political beliefs on both sides of the aisle.

Unfortunately, some have suggested the renewal of the deduction wouldn’t encourage more giving. In a Wall Street Journal opinion following the Giving USA data release, Dr. Leslie Lenkowsky asserted that extending the charitable deduction to all taxpayers would simply reduce taxes for Americans that donate to charity and may not increase donations. Most data shows the opposite – that tax deductions do indeed work to encourage more of a behavior. And the belief that economic growth alone will lead to more giving, which Dr. Lenkowsky posits as the solution to the decline, is contradicted by the fact that while giving fell in 2022, U.S. GDP grew by over 2 percent.

Beyond the data, moving the charitable deduction above the line is an issue of fairness and democracy. It sends the message that all donations from all Americans are helpful – not just gifts from the less than 10 percent of taxpayers who itemize. Over the long-term, we need all Americans to give more to charity.

The decline in donations in 2022 should serve as a call to action for lawmakers. If Congress wants to ensure a thriving civil society, prioritizing passage of the Charitable Act, bipartisan legislation that is proven to encourage generosity, is the logical next step.




Rebuttal: The Charitable Deduction Works