Our Burning Platform for a Universal Charitable Deduction

Our Burning Platform for a Universal Charitable Deduction

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Delaney told NPQ, “While the experts on both ends of the political spectrum are projecting huge losses in charitable giving of between $17 billion to $21 billion annually, I don’t think it will be quite that bad this first year, because most Americans won’t realize the full consequences of the new tax law until after they’ve filled out their tax forms a time or two. Whatever the early data show—now and even [over] the next couple of years—the harm will only get worse for the small and midsize nonprofits that serve people in their local communities.”

The universal deduction approach, also called a non-itemizer or above-the-line deduction, has a proven track record in the states for increasing charitable giving for all income levels of taxpayers. Currently, two states—Colorado and Minnesota—provide a giving incentive for taxpayers even when they do not itemize their deductions. Research by the National Council of Nonprofits on the Colorado tax law found that taxpayers in that state donated on average about $2,000 per year to charities. In response to concerns that the federal tax law could depress charitable donations, the legislatures in both Colorado and Minnesota considered bills to enhance the incentive by removing thresholds and limits. Neither bill prevailed this year, but state lawmakers are expected to promote the expanded deduction in 2019.

Source Name: 
Nonprofit Quarterly

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