Issue: Tax Policy
Request
We urge members of the House and Senate to:
- Be on the lookout for introduction of charitable giving legislation, which would renew and expand the charitable tax deduction for taxpayers who do not itemize deductions. The deduction allowed taxpayers to deduct up to $300 ($600 for couples) for charitable gifts during the pandemic, but it expired at the end of 2021, leading to a marked drop in small donations.
- Cosponsor it when it is introduced.
Introduction
Contributions to 501(c)(3) charities such as museums are tax-deductible, incentivizing those who itemize deductions to give more. Only about ten percent of taxpayers now itemize deductions, however, and both the amount given and the number of donors were declining prior to the pandemic. Smaller gifts increased during the pandemic due to the enactment of the temporary deduction.
Deductibility of Charitable Gifts
- Charitable giving accounts for more than one-third of museums’ operating funds.
- The CARES Act established a limited and temporary deduction for non-itemizers at the start of the pandemic. After having declined in 2019, charitable giving increased following its enactment and dropped after it expired.
- A universal charitable deduction democratizes giving by incentivizing all taxpayers to contribute, regardless of income.
Status
- Bipartisan bills are expected to be introduced in both the House and the Senate to renew and expand the universal charitable deduction. They are modeled on H.R. 1704 and S. 618 in the last Congress, which temporarily renewed the deduction and expanded it to over $4,000 for individuals and over $8,000 for couples.
- Senators who wish to cosponsor should contact the offices of James Lankford (R-OK) or Chris Coons (D-DE). Representatives should contact the office of Chris Pappas (D-NH). (The Republican chief sponsor in the House in the last Congress was the late Rep. Jackie Walorski of Indiana.)
Facts and Figures
More information on how the giving increased while the “universal charitable deduction” was in effect, and dropped when it expired, is available here.
Supporting Letters and Testimony
- Charitable Giving Coalition Submits 2017 Testimony to Senate Finance Committee
- Alliance Joins Coalition Letter Thanking Senators Thune and Wyden for Introducing CHARITY Act
- Joint Nonprofit Letter Opposing IRS Gift Substantiation Regulation
- Joint Letter Urging Congress to Act on Permanent Extension of Charitable Tax Provisions, Including Several Museums
- National Nonprofits Urge Congress to Renew Charitable Tax Provisions
- Alliance Joins Coalition Letter to Presidential Candidates in Support of Charitable Giving Deductions
- Alliance Joins Coalition Letter to Senate Finance Committee Working Groups
- Hundreds of Museums Join November Letter in Support of IRA Rollover
- Alliance Joins Charitable Deduction Letter to Rep. Paul Ryan
- Over 220 Museums Join Open House Letter in Support of IRA Rollover
- Alliance Joins Open Letter to House Ways and Means Committee (IRA Rollover)
- Alliance Joins IS Letter in Support of IRA Rollover
- 33 Senators Sign On to Letter to Protect Charitable Deduction
- Hundreds of Museums Join Charitable Deduction Letter
- Alliance Joins Letter to Senate Finance Committee
- Alliance Joins Coalition Letter to the White House
- Alliance Joins Coalition Letter to Senate Budget Committee
- Alliance Testimony on Tax Reform and Charitable Contributions
- Alliance Joins Statement to House Ways & Means Committee
- Ford Bell’s Testimony on Tax-Exempt Organizations
- Alliance Joins Letter Opposing Limitations to Charitable Deduction
- Alliance Joins IS Letter Supporting Preserving the Charitable Deduction