12/16/20 – Guest: Incentivizing the American Spirit of Giving for All
Throughout the month of December, the Charitable Giving Coalition will be featuring a variety of voices in the charitable sector through our Season of Giving Guest Blog Series. These posts feature a fraction of the endless good work America’s nonprofit organizations are doing.
Last month, many of us sat down at the Thanksgiving table and gave gratitude for our blessings during this tumultuous year. In this great nation of abundance, however, an overwhelming number of Americans are in need, as evidenced by the long lines at area foodbanks to receive food for their families. As we look ahead to 2021 and the enduring impact of this pandemic on our communities, it is important that we all continue supporting the most vulnerable through the preservation of charitable giving.
Here in Oklahoma, the Kirkpatrick Foundation, founded in 1955 by John and Eleanor Kirkpatrick, distributes approximately $3 million annually in grants and charitable activities. The philanthropy funds nonprofit organizations specializing in the arts, culture, education, animal wellbeing, environmental conservation, and historic preservation.
At Kirkpatrick Foundation, we experienced firsthand the effect tax policy can have on charitable giving and private foundations. The Tax Reform Act of 1969 and its restrictions imposed on private foundations led to a decision by John and Eleanor to create a public community foundation that could meet the charitable needs of individuals, families, companies, and organizations. Later that year, seed money in the amount of $45,000 was given by Kirkpatrick Foundation to establish the Oklahoma City Community Foundation. Since that time, the community foundation has flourished and currently has more than 1,800 funds and assets of $1.2 billion.
Fifty years later, we are now seeing the impact on charitable giving from another tax law, the Tax Cuts and Jobs Act of 2017 (TCJA), this time directly impacting our grantees. TCJA reduced the number of taxpayers who can deduct their charitable donations by about 60 percent, and after TCJA’s enactment, charitable giving not only declined the following year, it also lagged behind economic growth. While the Giving USA study reported an increase in charitable giving in 2019, charitable giving levels have yet to recover to 2017 levels. Combined with the economic fallout of COVID-19, giving was expected to decline even further from that 2017 peak.
Relief under the CARES Act provides a temporary universal charitable deduction (UCD) for all taxpayers, but Congress can go further to incentivize even more charitable giving from all Americans by passing the Universal Giving Pandemic Response Act (S. 4032, H.R. 7324). This bipartisan legislation would raise the $300 cap on the temporary UCD to over $4,000 for individuals and $8,000 for couples.
Altruism is good for all, and creating universal charitable giving incentives is not only good tax policy, it encourages all Americans, regardless of income, to give. Philanthropy and the government rely on individual charitable giving to support the charities and nonprofits that make our communities thrive. It is this giving spirit that will allow everyone to have a seat at the Thanksgiving table for years to come.