12/10/20 – Guest: Do Lawmakers Think Giving Incentives Work? Congress’ Actions Speak For Themselves

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. 

As the holiday season is upon us, our country finds itself in the midst of a continuing national calamity as the pandemic endures. With this challenge, our government has again looked to America’s generosity for help alleviating some of the struggles created by the pandemic. This continues their pattern of increasing giving incentives in response to a crisis, having done so almost ten times in the last 20 years.

Whether it was the hurricanes in the south like Katrina, wildfires in the west, or the 2008 financial crisis, Congress has repeatedly recognized that increased charitable giving can help our country overcome disaster-related suffering. Congress’ proclivity for incentivizing increased giving during times of struggle is only growing, having enacted disaster relief bills that expand individual giving incentives in each of the last three years. In practice, Congress has most often expanded the adjusted gross income limit on the charitable deduction to 100 percent for disaster-related giving, up from 50 or 60 percent, to encourage donors to give more of their income.

This year, Congress went even further. To counter the Coronavirus pandemic, it created a $300 universal charitable deduction in the CARES Act available to all taxpayers, not just itemizers, and it’s working. Donations in the second quarter were up compared to last year, with the greatest increase in donations coming from those giving $250 dollars or less.

Implicit in Congress’ actions is a recognition that the nonprofit community is uniquely equipped to respond to any disaster, with decentralized infrastructure and a presence in every community allowing robust and nimble assistance to counter the array of challenges a disaster presents.

Unfortunately, with cases still rising and the vaccine likely still months away from widespread distribution, the universal charitable deduction is set to expire at year’s end. Congress should heed their recent past and extend the individual giving incentives set to expire, consistent with its ongoing and frequent recognition that these incentives are an effective tool to respond to disasters and alleviate suffering.

Sandra Swirski & Grant Berkshire
Urban Swirski & Associates