The newly released Giving USA 2023 report provides continued cause for concern about our nation’s ongoing decline in charitable giving from individuals and in the number of individual givers. These data lend more urgency for the need to pass the Charitable Act, which would incentivize millions more Americans to give and support their communities—not just the shrinking number of Americans who itemize their taxes.
The Giving USA report shows that Individual giving declined 6.4% in 2022 (13.4% when adjusted for inflation). This was the steepest inflation-adjusted drop of the four main sources of giving (giving from foundations, corporations, and bequests posted inflation-adjusted declines of 4-5%). What’s more, total charitable giving dropped by 3.4% (10.5% when adjusted for inflation), which has happened only three other times in the last 40 years: 1987, 2008, and 2009.
The report also confirms the ongoing trend in our country of charitable gifts coming from fewer and fewer individuals, with wealthier individuals continuing to represent a growing share of giving. For the second year in a row, very large gifts by some of the wealthiest Americans represented nearly 5% of individual giving. Mega-giving from six individuals and couples totaled $13.96 billion. Between 2010 and 2016, as many as 20 million households dropped out of charitable giving—and stayed out. Ever since, individual giving has come from fewer and fewer givers. Individual giving has been declining as a share of total giving for several years. It dropped to 70% of total giving in 2018, which was considered low at that time, and has steadily decreased since then, falling further in 2022 to 64%. This decline coincides with the passage of the Tax Cuts and Jobs Act in 2017, which nearly doubled the standard deduction and resulted in a drastic drop in the number of taxpayers who itemized their deductions and thus were able to take advantage of the charitable deduction.
The Charitable Act can help to reverse this disturbing trend. It would restore the non-itemizer charitable deduction for tax years 2023 and 2024, ensuring that every American who donates or tithes is able to benefit from the charitable deduction. Specifically, this legislation would raise the previous $300/$600 cap on the non-itemizer deduction to 1/3 of the standard deduction, equal to roughly $4,500 for individuals, and $9,000 for joint filers.
There is clear proof that the universal charitable deduction works to incentivize giving from a broader range of Americans. In March 2020, Congress enacted a $300 charitable deduction for cash gifts from nonitemizers for 2020. In December 2020, Congress extended its availability through 2021 and increased the cap to $600 for joint filers. Thereafter, the number of small gifts – especially those of $300 and $600 – saw a significant increase before collapsing once the deduction expired at the end of 2021.
With individual giving still representing the largest share of charitable giving, we have to be attentive to what can be done to encourage more people to give. Charities across the country rely on these funds to support their vital work to ensure vibrant and equitable communities. United Philanthropy Forum believes that a universal charitable deduction would be an effective way to encourage Americans to contribute more to charities, help strengthen a longstanding culture of giving in our country, and incentivize taxpayers to make charitable investments in the communities and causes they care about.
You can learn more about the universal charitable deduction and the Charitable Act at United Philanthropy Forum’s website. You can take action to support the Charitable Act via the Forum's Advocate Action Center.
President & CEO
United Philanthropy Forum