WASHINGTON, DC – Both the House and Senate are actively considering major tax reform legislation this week and next, which will dramatically alter tax incentives for charitable giving.  As a result of this fast-moving legislation, CGP is asking all members to contact their Members of Congress today and tomorrow to advocate for a universal charitable deduction.  Given all that’s at stake, the time to act is now.  Background information, a call to action, and suggested talking points are below.

BACKGROUND INFORMATION:

Last week, House leaders introduced H.R. 1, the Tax Cuts and Jobs Act, which would nearly double the standard deduction and eliminate personal exemptions and almost all itemized deductions, among many other provisions.  Although the legislation maintains the current-law charitable deduction (and even raises the AGI limitation to 60% for cash gifts), the vast majority of taxpayers – as many as 95% according to the bill sponsors – would no longer itemize under this plan.  These taxpayers would therefore not be eligible to take a charitable deduction.  In real terms, this means roughly 30 million taxpayers who itemized in 2016 would no longer have access to the incentive and would be taxed on their charitable gifts.  And, if Congress makes these changes, charitable giving could decrease by $4.9 billion to $13.1 billion, according to one highly-regarded Indiana University study.

The Committee on Ways & Means has been voting on amendments to H.R. 1 all week and is expected to give final approval to the bill at some point today.  The legislation will then head to the House floor for votes next week.   

Also taking place tomorrow, Senate leaders will unveil a draft of their tax reform legislation, which will then be considered by the Finance Committee starting Monday. 

CALL TO ACTION:

Given these developments, CGP is asking each member to:

1. Call their Representative TODAY and ask that they contact the Ways & Means Committee to request they add a universal charitable deduction to H.R. 1.

2. Call their two Senators TODAY and TOMORROW and ask that they contact the Finance Committee to request they include a universal charitable deduction in the Senate tax reform bill.

Members can find the contact information for Representatives and Senators on CGP’s Advocacy Page under Resource Links.

TALKING POINTS:

Charitable Giving

• Charitable giving allows Americans to create, fund, and operate institutions that are the fabric of our civil society.  It supports nearly every facet of life in our communities: education, research, health services, housing and shelter, job training, arts, culture, environmental protection, historic preservation, civil rights, civic engagement and so much more.
• In 2016, individuals across the country gave an estimated $282 billion to charity, according to Giving USA.
• These charitable dollars are vital to America’s charities, which continue to face tremendous demand for their services

The Charitable Deduction

• 2017 marks the 100^th anniversary of the charitable tax deduction.  This is a remarkable milestone, and now is not the time to reduce the value of America’s long-standing giving tradition.

• The charitable tax deduction is unique and good tax policy because it encourages individuals to give away more of their income, investing it in their communities.

• A calculation of the charitable deduction suggests that those in need receive $2.50 in benefit for every $1 of tax benefit going to the donor. This is an impressive return on investment.
• But, changes to the tax code currently under consideration could severely diminish charitable giving.  Studies from highly-regarded think tanks and universities, including Urban-Brookings Tax Policy Center, Tax Foundation, American Enterprise Institute, and Indiana University, find – report after report – that charitable giving will significantly decline if the charitable deduction is limited or constrained.

Our “Ask”

• Tax reform should take good tax policy and make it better – it should include incentives to encourage more Americans to give more money to charity.

• American voters strongly support incentives for charitable giving.

• Congress should therefore enact a “Universal Charitable Deduction” or above-the-line charitable deduction that is available to all taxpayers.[1] 
• Regardless of income level, all American taxpayers should receive an incentive to give to charity. 
• This tax incentive should not be tied to itemizing deductions – it should be available broadly in order to:
  • Increase giving, in terms of both dollars and donors;
  • Increase fairness by treating all taxpayers’ contributions equally; and
  • Provide modest tax relief to middle- and lower-income taxpayers.
• And, it would not only offset loses to charitable giving caused by tax reform, it would actually increase giving.  According to the Indiana University study, if provisions in the unified framework were enacted into law but Congress chose to allow all taxpayers to take the charitable deduction, overall giving would increase by $1.1 billion to $4.7 billion.

About CGP

• The National Association of Charitable Gift Planners (“CGP”), formerly the Partnership for Philanthropic Planning, is a 501(c)(3) public charity representing over 8,000 members with a network of over 100 local councils throughout the country.  CGP members include professionals involved in the charitable gift planning process, including fundraising professionals and administrators, estate planners, financial advisors, consultants, and allied professionals. 
• CGP is the leading organization in charitable gift planning and provides standards and guidelines for the profession, advocacy for a positive legal and tax environment for charitable giving, and education in all areas of charitable gift planning. 
• CGP also convenes the National Conference on Philanthropic Planning, the largest annual conference in the field, and sustains the CGP Leadership Institute which provides thought leadership to practitioners.