WASHINGTON, DC – This Giving Tuesday, the Charitable Giving Coalition (CGC), with the support of over 470 charitable and nonprofit organizations from 50 states, has urged Congress to strengthen charitable giving. In a letter to the House Ways and Means Committee and Senate Finance Committee, the CGC called for a permanent charitable deduction for non-itemizers to be included in a year-end 2024 tax package or the final 2025 tax reform package.
In the letter, Brian Flahaven, Chair of the Charitable Giving Coalition, highlights the critical role charities play in supporting communities across the country and the concerning decline in charitable giving and donors in recent years. The CGC expressed strong support for the bipartisan Charitable Act (H.R. 3435/S. 566), which would restore the charitable deduction for all taxpayers.
“The Charitable Act is a proven, bipartisan solution to incentivize charitable giving, ensure equitable access to the charitable deduction for all taxpayers, and provide essential resources to nonprofits of all types and sizes,” said Flahaven. “Charities are the backbone of our communities. From providing critical disaster relief to addressing basic needs, they are often the first line of support in times of crisis. We thank the leaders in Congress who have supported this effort and urge swift action to ensure these organizations have the resources to meet the growing needs of families and communities across the nation.”
The CGC letter outlines key concerns, including:
- Decline in Charitable Giving: Following the 2017 Tax Cuts and Jobs Act, which doubled the standard deduction, charitable giving by middle- and lower-income taxpayers dropped significantly, leaving fewer Americans with access to the charitable deduction.
- Impact on Nonprofits: Nonprofits contribute 5.4 percent to the U.S. GDP and employ nearly 10 percent of the private workforce. However, the sector is experiencing a steep decline in donors and donations, threatening its ability to provide critical services.
- Proven Policy Solution: Data from the temporary charitable deduction for non-itemizers enacted during the pandemic in 2020 and 2021 shows a significant increase in small donations. Over 42 million taxpayers utilized the deduction, contributing $10.9 billion to charities during that time.
The CGC emphasized that restoring the charitable deduction for non-itemizers will incentivize giving across all income levels, enabling more Americans to support vital organizations such as food banks, shelters, disaster relief groups, schools, cultural institutions, and faith-based organizations.
The Charitable Act has received robust bipartisan support, with 64 cosponsors in the House and 24 in the Senate. The bill proposes allowing non-itemizing taxpayers to deduct up to one-third of the standard deduction for charitable contributions, providing a much-needed incentive to increase donations.
The CGC stands ready to work with Congress as it considers year-end tax legislation and broader tax reform in 2025.