NAICU Washington Update

Nonprofit Charitable Giving Focus of Senate Hearing

March 18, 2022

This week, the Senate Committee on Finance held a hearing examining charitable giving and trends in the nonprofit sector.  It was a welcome bipartisan discussion of the current charitable giving incentives in the tax code, the pandemic stimulus incentives that have largely expired, and what new incentives might be considered to spur additional giving.

Chairman Ron Wyden (D-OR) opened the hearing stating that promoting charitable giving is a priority for both Democrats and Republicans and that the committee is examining ways to increase giving in the U.S.  Sen. Wyden stated, “The charitable deduction is a lifeline, not a loophole.”  Other committee members reinforced their support for existing incentives and expanding and extending those that were enacted during the past two years as pandemic incentives.

Senator James Lankford (R-OK) pushed for consideration of bipartisan charitable giving legislation he sponsored, along with several members of the Finance committee.  The Universal Giving Pandemic Response and Recovery Act, which would establish a permanent universal charitable deduction built on the expansions in the stimulus bills.  The bill would allow donors to nonprofits the ability to deduct their donations from their federal taxes at a rate valued at one third of the standard deduction (up to $4,000 for single filers and $8,000 for married/joint filers).  

Witnesses included representatives from Independent Sector, Indiana University, and the Urban Institute, as well as a local food bank director from Oregon.  Almost all witnesses spoke to the continued importance of charitable giving during the pandemic as well as the need arising from the war in Ukraine. There was widespread support for continuing the pandemic charitable incentives and the employee retention credit, which have been invaluable to the nonprofit sector.  Additionally, some witnesses mentioned the need to extend the child tax credit.

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