June 2, 2020; Law360
As readers may remember, the CARES Act included a $300 above-the-line charitable deduction, but this was widely considered too modest a step to have much effect on the promotion of giving. Now, some organizing behind the scenes has resulted in a bipartisan group of six senators who back expansion of the measure.
The sponsors of the effort include the American Cancer Society Cancer Action Network, American Red Cross, Americans for the Arts, Catholic Charities USA, Council for Advancement and Support of Education, Easterseals, Faith and Giving Coalition, Girl Scouts of the USA, Jewish Federations of North America, National Council of Nonprofits, The Salvation Army USA, Union of Orthodox Jewish Congregations of America, United Way Worldwide, Volunteers of America, YMCA of the USA, and YWCA USA. What’s important about most of these groups is they have extensive networks that include local constituents that can educate and advocate.
The senators backing this pursuit are Chris Coons (D-DE), Amy Klobuchar (D-MN), James Lankford (R-OK), Mike Lee (R-UT), Tim Scott (R-SC), and Jeanne Shaheen (D-NH). Five of them appeared on a webinar this week hosted by the National Council of Nonprofits to discuss it; it drew 4,500 participants.
To remind NPQ readers of the context of this effort, research by Dr. Patrick Rooney (see here and here) and others over the past eighteen months has shown that while the amount of money given has not decreased year upon year over the past decade, the number of households participating in giving has. This poses a problem not only for nonprofits, but for our democracy. Many believe that making the charitable deduction universal will stimulate giving by middle- and lower-income households, among whom giving has declined. NPQ took a position advocating the Universal Charitable Deduction in 2018.
The above-the-line deduction currently provided for in the CARES Act was originally inaccurately summarized as a “temporary incentive,” but it actually applies to “taxable years beginning after December 31, 2019,” so any expansion would need to address only raising the deduction cap, and not the permanence question as was assumed previously.
NPQ will run a feature on Monday by Dr. Patrick Rooney that presents research on this question.—Ruth McCambridge