The Nonprofit Sector Losing Billions in Charitable Giving Each Year!
Nonprofits are facing a surge in demand for their services, but funding isn’t keeping pace. This gap is widening due to the ongoing health and economic crises, making it more crucial than ever to incentivize charitable giving. Nonprofits will play a vital role in recovery efforts, and they need resources to do so effectively.
A universal charitable deduction, available to all taxpayers regardless of itemization, would empower individuals to contribute more to their communities. This type of deduction allows people to directly support the causes they care about most.
Recent data highlights the urgency of this issue:
- Charitable giving declined in 2023: Overall giving dropped by 2.1% after inflation, following a steep 13.4% decline in individual giving in 2022.
- Giving hasn’t recovered since 2021: Total giving remains below the peak seen in 2021, the last year a universal deduction was in place.
- The 2017 tax law had a negative impact: Changes to the standard deduction led to a significant drop in itemized charitable deductions, particularly among lower-income taxpayers.
While the 2017 tax law aimed to simplify taxes, it inadvertently made charitable giving a “luxury good,” primarily benefiting high-income donors.
The good news? There’s evidence that a universal charitable deduction works.
- The 2020-2021 universal deduction boosted giving: This temporary measure resulted in an extra $18 billion in donations in 2021 alone, with over 47 million households utilizing it.
- It reached a wider range of donors: One-fifth of the donations came from taxpayers with incomes below $30,000.
The expiration of the universal deduction is a missed opportunity. Reinstatement would not only provide much-needed support for nonprofits but also empower individuals at all income levels to contribute to the well-being of their communities.
Give Your Organization a Voice in Restoring the Itemized Charitable Deduction for Average Americans, Not Just the Wealthy
As many of you know, Tennessee Nonprofit Network has partnered with the Charitable Giving Coalition (CGC) to encourage our federal legislators to restore this important deduction to bolster the nonprofit sector by increasing giving among most Americans. I’m writing to invite you to sign on to an updated letter that is being submitted next week will submit next week.
On October 15, the CGC will be submitting comments to the House Committee on Ways and Means Republican Tax Teams urging the committee to permanently enact a charitable deduction for non-itemizers (see link to sign on and comment letter below). The letter will also be shared with Democrats on the committee. Restoring the charitable deduction is supported by both parties!
To show your support, we encourage your organization to sign on to our comment letter. To be listed on the letter that is submitted to the committee, please complete the form by Monday, October 14. After that date, CGC will still accept sign ons and will periodically update the list of organizations, with the goal of sending the same letter to congressional leaders around Giving Tuesday (December 3, 2024).
- Sign on to CGC Tax Team Comment Letter
- Text of Letter: Charitable Giving Coalition Comment Letter to House Committee on Ways and Means’ Republican Tax Teams
Please also share this e-mail with other organizations who may be interested in signing on.
Thank you for your consideration and for your support!