August 5, 2019; ThinkAdvisor
Last month, a measure was introduced in the US House of Representatives that would allow regular donors to establish pre-tax accounts for flexible giving through their employers. The Everyday Philanthropist Act is sponsored by US Representatives Vern Buchanan (R-FL) and Thomas Suozzi (D-NY). These accounts would require no minimum contribution and would go up to a maximum of $2,700. They would be available employees not classified “highly compensated.”
This measure responds to a number of trends: reduced use of United Ways for workplace giving (and a corresponding increase in the use of donor-advised funds) and a decrease in charitable giving among low- to middle-income households, evidence for which you can find here.
This proposal joins the Charitable Giving Tax Deduction Act as a proposal intended to offset what many see as the deleterious effects of the 2018 tax overhaul bill. That bill, the idea behind which has been in play for some time and is otherwise known as the “universal charitable deduction act,” was introduced and sent to the House Ways and Means Committee in May 2018. It would allow taxpayers who are not wealthy to write off charity donations, whether or not they itemize.
NPQ has taken a “pro” position on this last measure, as can be read here. We think everyone should be actively advocating for this to their legislators.—Ruth McCambridge