2017 marked the 100th anniversary of the charitable deduction.
Since 1917, the federal charitable tax deduction has provided a tax deduction for donations made to nonprofit organizations by taxpayers who itemize their tax returns, roughly one-third of all Americans. The charitable deduction is a vital and unique incentive that encourages a selfless act. For every $1 subject to the charitable deduction, communities receive $3 in benefits. It's unlikely government could find a better way to leverage private investment in community services. Congress is now considering proposals that would reduce the value of the charitable deduction, putting at risk billions of dollars in donations to support nonprofits that serve millions of people every day.
Consistent with the Forum’s mission to enhance and expand philanthropy, the Forum supports public policy that encourages charitable giving. The Forum supports the role that tax policy plays in encouraging and structuring gifts that support nonprofit organizations and communities. The Forum board adopted the following position statement in support of the charitable deduction: "The Forum supports making the charitable deduction available to all taxpayers to incentivize giving by every American."
Universal Charitable Deduction Act of 2017 (H.R. 3988)
The Universal Charitable Giving Act of 2017 (H.R. 3988) was introduced by Rep. Mark Walker (R-N.C.) on October 5, 2017. The bill would establish a universal charitable deduction for individuals and married couples who do not itemize, in addition to the standard deduction. The tax deduction would be an above-the-line deduction up to one-third of the standard deduction – about $2,100 for individuals and $4,200 for married couples. Under current law, taxpayers who itemize their deductions receive a tax incentive for contributions made to qualified charitable organizations, but non-itemizers do not. H.R. 3988 has been referred to the Committee on Ways and Means.
Charitable Deduction Facts
- Americans gave $264.58 billion to charity in 2015 (the most recent data collected), according to Giving USA
- Taxpayers who receive a deduction for their contributions give more to charities than those that do not receive a deduction, regardless of income level
- Proposed changes to the tax code would reduce giving by $14-$27 billion, according to studies by the Tax Policy Center and American Enterprise Institute, among others
- A 2017 poll found that 75% of voters support expanding the charitable deduction to all taxpayers
- A 2017 study found that making the charitable deduction available to all taxpayers could increase annual giving by up to $4.8 billion
- Giving100 - The Forum has signed on to the Champion's Wall for Giving100, a campaign to make the charitable deduction available to all taxpayers
- Charitable Giving Coalition - The Forum is a member of the Charitable Giving Coalition, a national coaliton of nonprofit and philanthropic organizations working to protect charitable giving
- Tax Reform Talking Points and Resources
Studies on the Impact of Proposals to Limit the Deduction
- JCT Analysis of Tax Reform Act of 2014
- Tax Policy Center Estimates on Charitable Provisions
- Tax Policy Center Description and Analysis of the Camp Tax Reform Plan