Universal Charitable Deduction Bill, Known as ‘Charitable Act,’ Introduced in the House

The Charitable Act — considered a longshot to pass as a standalone bill — gained momentum as it was introduced in the U.S. House of Representatives earlier this month. 

Reps. Blake Moore, Danny K. Davis, Michelle Steel and Chris Pappas threw their support behind the universal charitable deduction when they introduced the bill on May 17. Senators first introduced the Charitable Act on Feb. 28.

The Charitable Act, if passed, would reinstitute the universal charitable deduction that was available to taxpayers who opted for the standard deduction during the pandemic in tax years 2020 and 2021. Currently, those who choose to take the standard deduction are not able to claim deductions for charitable giving, which nonprofit sector advocates claim has hurt giving. Combined with inflation, the universal charitable deduction expiration may have contributed to 2022 becoming the first year in a decade that donation dollars declined. 

“According to data compiled by AFP’s Fundraising Effectiveness Project, the number of small donations went up in 2020 and 2021 after Congress enacted a universal charitable deduction but then small-gift donors collapsed in 2022 after the temporary universal charitable deduction was not renewed,” Mike Geiger, president and CEO of the Association of Fundraising Professionals, said in a statement. 

The temporary universal charitable deduction in 2021 and 2022 resulted in $10.9 billion for charities, with 25% of that coming from Americans making less than $30,000, according to Moore’s office. 

“This important bipartisan and bicameral bill bolsters the power of American generosity by enabling more people to support the causes they hold dear,” Moore, a Republican Congressman from Utah, said in a statement. “Every American, regardless of their income, can contribute by helping charities, nonprofits and religious organizations provide vital services that go far beyond the government’s reach.”

Unlike the previous maximum benefit of $300 for individuals and $600 for joint filers, the legislation would increase the incentive to about a third of the standard deduction, or roughly $4,500 and $9,000, respectively. 

“Supporting charitable giving is an example of good citizenship,” Davis, an Illinois Democrat, said in a statement. “Charitable contributions from individuals are vital to the ability of our churches, food banks and other nonprofits to meet local needs. Research is clear that this charitable deduction generates the giving that helps our communities thrive.”

Here are a few nonprofits that have voiced their support for the Universal Charitable Deduction becoming permanent:

“Our country is stronger when everyone can support the charitable organizations that work tirelessly to improve and enrich our communities. The renewal and expansion of the universal charitable deduction for non-itemizing taxpayers through the Charitable Act would encourage philanthropic-minded individuals nationwide, regardless of income, to give to charity. The American Heart Association … urges Congress to move the bill forward quickly,”

- Mark Schoeberl, executive vice president of advocacy, American Heart Association

“Goodwill Industries International supports the bipartisan introduction of The Charitable Act. At a time when the nonprofit sector is seeing an increased need for programs while funds are tightening, Congress should do everything in its power to incentivize giving. Donors are vital to our ability to fulfill our mission of providing workforce development and job training services.”

- Steven C. Preston, president and CEO of Goodwill Industries International

"Nonprofits need tools like the non-itemizer deduction proposed by the Charitable Act to meet growing and changing community needs. As expected, the universal charitable deduction enacted temporarily during the height of the pandemic unlocked more giving. Making the deduction permanent will provide an ongoing incentive to increase giving and also will counteract inflation.”

- Suzanne McCormick, president and CEO of YMCA of the USA