Lawmakers Reintroduce Bipartisan Plan to Restore Tax Credits for Charitable Giving

Lawmakers on Capitol Hill have announced bipartisan legislation to restore tax credits for Americans who donate to nonprofits.

Senators James Lankford (R-OK) and Chris Coons (D-DE) have reintroduced the Charitable Act. It would "reward Americans who give to charity" to "incentivize more people to donate to worthy causes," which include houses of worship, religious organizations, and other nonprofits.

Currently, if a taxpayer does not itemize their taxes, they cannot deduct charitable donations. 

If passed, the bill would allow families to deduct their donations from their federal taxes at a level around $4,600, compared to the previous $300 deduction.

A similar provision was first included in the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was signed into law by President Trump in 2020.

At that time, 90 million taxpayers benefited from the deduction, and households making between $30,000 and $100,000 increased their charitable giving. Charitable organizations received $30 billion in increased donations as a result, a statement from the senators explains.

Since then, charitable giving has dropped, especially among evangelicals.

As CBN News reported, as grocery and gas prices have gone up, church giving has gone down.  

A recent Ministry Brands study reveals that in 2023 there was a 55 percent decrease in giving to churches. And according to Infinity Concepts and Grey Matter, research finds the "proportion of evangelicals giving to church fell 13 percentage points from 2021, constituting a 17% decrease in giving."

"The takeaway is that there has been a change over the last three years in terms of the generosity of the evangelical community, both toward the church and toward nonprofit organizations or charities," said Mark Dreistadt, with Infinity Concepts. "We've seen a drop in giving across the board."

It's a critical concern among church leaders. 

"It's something that is of concern, certainly, for every church and every nonprofit organization that depends on donor dollars," he said. "This becomes a very critical thing because … in some cases, the giving is down as much as 15%. And if you're working with a tight budget, a 15% loss of revenue can be critical."

Lankford recently told CBN News this is part of the reason why he is pushing for such legislation.

"We want to create an environment where we tell people the safety net of the world is not the federal government. It's the families first, our churches and nonprofits," said Lankford.

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He added, "I'm very proud of how many Americans actually give to nonprofits, but we want people to actually be able to give a little bit more. Right now, the average American gives about 1.7% of their income to a nonprofit – 1.7%. That's not a lot."

Hundreds of nonprofits are backing the measure and are stressing that charitable giving is important for a thriving economy. 

"The temporary non-itemizer charitable deduction implemented in 2020 and 2021 led to an additional $18 billion in donations to nonprofits," said Diane Yentel, President & CEO of the National Council of Nonprofits. "As nonprofits are faced with higher demand for services, increased costs, workforce challenges, and declining donations, the Charitable Act presents an opportunity to reinstate that incentive and provide nonprofits with more resources to carry out their mission."

"Nonprofits are the backbone of our communities, addressing critical needs and enhancing the quality of life for all. The Charitable Act is a vital step in restoring a proven incentive that encourages generosity and empowers nonprofits to meet growing demands, even in challenging times. We applaud Senators Lankford and Coons for their leadership and steadfast commitment to strengthening the nonprofit sector, ensuring we can continue to deliver essential services and drive positive change," said Sheila Bravo, President and CEO of Delaware Alliance for Nonprofit Advancement.