David Thompson, vice president of public policy at the National Council of Nonprofits, also praised the expanded charitable deduction but complained the legislation lacks other key nonprofit needs including:

• Expanded eligibility for emergency loans, which are currently limited to nonprofits with 500 or fewer employees.
• Full federal reimbursement of benefits paid to employees by nonprofits that self-fund unemployment benefits. Under the stimulus bill enacted in late March, nonprofits must pay 50 percent of the costs of benefits provided to their laid-off employees.

The Senate legislation would increase penalties for overstatement of a charitable deduction — but only for people who don't itemize. Under current law, the penalty for an improper deduction is 20 percent for all taxpayers. The bill would raise the penalty to 50 percent for taxpayers who don't itemize.

Thompson criticized that provision, saying it "seems to assume that some taxpayers are less honest than others."