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Update on the Charitable Tax Act 2024 (that will hurt donations)

Nonprofitnewsfeed.com How The Nonprofit Sector Lost Out On $17 Billion In The Soon-To-Lapse Charitable Deduction Act In a giving season when many smaller and medium-sized nonprofit organizations wonder about how to retain and expand their small-dollar donors in relation to stagnant donations, perhaps one of the more salient solutions is about to expire. House Resolution (H.R.) 3435, better known as the “Charitable Act,” (see also S. 556) is soon to meet its demise via legislative purgatory. The Charitable Act, which organizations such as Independent Sector cites as a valuable opportunity to spur increases in giving, will soon expire with a less than 1% chance of passing, according to GovTrack. The bill would have increased the standard deduction for tax filers that do not itemize taxes to approximately $4,000, giving the 85% of U.S. taxpayers who do not itemize their tax returns access to the same benefits of donating to charity that wealthy donors employ. For now though, the standard deduction remains at $300/$600 as the standard deduction for charitable giving. Let’s put this another way, when Warren Buffett donated $51 billion last year, and because he has access to expensive tax experts who could itemize his return, he got the full deduction in his taxes for charitable giving. But Buffy (not a real person but a heck of a vampire slayer) who donated $1,000 and didn’t itemize their return (just like the overwhelming majority of Americans), only got $300 of the donation taken off their tax bill. In a tax system that intentionally perpetuates complexity, this inequitable access to deductions is particularly painful for a nonprofit sector desperately trying to maintain their grassroots donors. ------- Listen to our podcast: Wholewhale.com/Podcast On Facebook: https://www.facebook.com/WholeWhale Tweet us: @WholeWhale Our website: WholeWhale.com/

WholeWhale

4 weeks ago
this week on nonprofit Newsfeed of course brought  to you by whole whale a b Corp digital agency my name is George Wier I'm the chief Whaler and  we have Nick azay digital strategist at whole whale and look we love talking about nonprofit  news and we had a comment on YouTube and I know the rest of that sentence usually goes poorly  but this time they were asking about a story we did last year about the charitable act and so  the charitable deductions Act is in the news we did a little followup
very well I'm excited to  to talk through it and the implications we also have a little news about controversy around  woke kindergarten in St Francisco and open AI maybe working with another nonprofit Common  Sense Media Nick how's it going it's going great George yeah so exactly to your point we want to  start by talking about how the nonprofit sector potentially lost 17 billion in the soon laughs  charitable deduction act this is one you want to buckle up for so George on this podcast we  tal
k a lot about fundraising giving season this year was me it was blogs a lot of organizations  were either stagnant saw small dollar donors go down so you know you and I pay attention to  things that could potentially help the small dollar donor landscape and apparently so was the  House of Representatives HR 3435 better known as the charitable act see also Senate resolution 55  would have if spur increases in giving by changing tax law to increase the standard deduction for  tax filers that do n
ot itemize their taxes to approximately $4,000 what does that mean it means  that if you don't itemize your taxes which 85% of Americans don't you don't get the full benefits  of the deduction for charitable giving that the the high rollers get when they have armies of  tax attorneys and that kind of thing so what this would have done was it would have made  it much easier for the common everyday person to get the tax benefits of charitable donations  however house resolution 3435 is about to ex
pire the Senate resolution also about to expire  less than 1% chance of passing George this is really disappointing this seemed like almost  a no-brainer piece of legislation that could have made a real impact in getting small dollar  donors to contribute to charity via a fairly straightforward rule change in tax law and the  organization independent sector did an analysis of this and estimates that approximately $ 17  billion doar was left on the table by not passing this bill into law George t
his is something  we care a lot about here at whole whale taxes can be kind of boring but really really important  when it comes to charitable giving so what do we think about this I think you did a awesome job  summarizing it all and I was pretty surprised I thought this had gone through but then clearly  nothing went through and that is a big difference right between $300 and $4,000 put another way  let's say you know you gave ,000 but you don't itemize you're only getting $300 of that value 
off of your taxes that's not the motivator but it is also a factor in sort of the charitable  status of giving to nonprofits I don't get it this bill when I look at it like literally it had  40 co-sponsors it was brought in in May there was two of them two two separate charitable acts  brought in also number 3435 and you can look at gov track and and it just stalled there was 20  Republicans 20 Democrats yeah I mean I don't quite get it it's now at a 1% chance of being enacted  which which is es
sentially zero according to gov track I think if you're looking at it $17 billion  is the the headline we put out there it was an analysis done by the independent sector it is  a big number right there is a lot left on the table and it's something that should be passed it  should be passed it's uh only going to help the nonprofit sector and strengthen those longtail  donors we have seen we have seen decreases in this year-over-year and uh I think this is part  of that equation so if you were a n
onprofit out there like that has power in this domain like this  would raise like all Tides like this would raise all the boats and it is it you know it was sad to  to look this P up so hopefully something new gets introduced we'll be watching it I haven't seen  this written up anywhere at all and so we are talking about it so you now have all our updates  on what happened to the the charitable act see Nick every we always say we'll keep an eye on it  we kept an eye on it this one we kept an eye
on and while we kept the ball rolling Congress did  not which is really sad and I think don't get it if you're an advocacy organization you need to  do two things if you really care about this and you know you you're interacting with legislators  at the national level even the state local level do two things make the cost of ignoring this  harder say hey this is a real easy solution why are you ignoring this and then incentivize them  say Hey you wna you're a legislator you want to help communi
ties that you claim to represent and  claim to want to help why don't you pass this very simple piece of legislation that provides a level  of tax Equity to 85% Americans who don't itemize their taxes and can help the nonprofit sector  as opposed to maintaining the labyrinthine tax system that's already all sorts of problematic  labin Laban nice ni book I don't even know how to pronounce that I just you know to put another  view of this look at your average donor in your system basically anyone
that went over $300 and  is not like a large large donor who's probably itemizing their taxes as you mentioned stats  from the IRS put out there said about 85% of folks are taking that sort of non-itemized that  basic like hey here are standard deductions you know according to charal giving stats the average  donation size for homes making less than $100,000 as I'm looking up is about uh $3,200 and even  the low range of folks around $30,000 adjusted gross income their average shareable donation
was  $2,500 I mean you're not even getting the benefits of that on your taxes and it's going into the  local community's distribution of wealth in the way that you want for as you mentioned small  nonprofits ones that are working and I don't get it Nick all right enough hand ringing  we brought you the information absolutely

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