Total charitable giving from individuals, foundations, businesses, and bequests dropped by 3.4% in current dollars and 10.5% relative to inflation last year, according to the annual Giving USA report released last month.
Donations from individuals fell by 6.4 percent (a decline of 13.4 percent when adjusted for inflation). Total giving fell to just under $500 billion last year. According to the report, this is just the fourth time in forty years that donations did not increase year over year. This news is especially troubling in light of the challenges nonprofits face that include workforce shortages and decreasing revenue sources.
From a public policy perspective, the report highlights the critical importance of Congress passing the Charitable Act (S. 566/H.R. 3435), which would reestablish and expand a non-itemizer or universal charitable deduction. Congress had adopted the non-itemizer option on a temporary basis for 2020 and 2021. The new data show the huge drop off when that law expired.
Restoring a non-itemizer deduction would help offset the reductions in individual philanthropy by encouraging more people to give more generously to the work of charitable nonprofits. Specifically, the Charitable Act would create an above-the-line tax deduction for non-itemizers who make charitable contributions. The deduction would be capped at one-third of the standard deduction (about $4,600 for individuals and $9,200 for couples).
From Nonprofit Champion
