By AMERICAN HEART ASSOCIATION NEWS
A group of nonprofit organizations, foundations and corporations is calling on lawmakers to expand the charitable deduction incentive to 100 percent of American taxpayers.
The group’s Giving100 campaign is named for this year’s 100th anniversary of the charitable tax deduction.
Currently, 30 percent of taxpayers take advantage of the charitable deduction. A major hurdle is the fact that the U.S. tax code mandates that taxpayers must itemize their taxes to be eligible for this deduction. About 100 million American taxpayers do not itemize on their taxes.
Typically, individuals who itemize have higher incomes. But according to Giving100, Americans who earn the least give six times more — as a percentage of their income – to charity than those who earn the most.
A 2014 analysis by the American Heart Association and Quantria Strategies found that tax reform proposals that seek to reduce or eliminate the charitable deduction could lower donations to the AHA by millions. Forty percent of donations to the AHA come from individuals who do not itemize their taxes, according to the study. In contrast – proposals to allow nonitemizers to receive a tax credit would increase those donations.
Changes to the tax code could affect other non-profit organizations and foundations similarly.
Giving100 notes that every $1 tax incentive provided by the federal government unlocks $3 in charitable action, which would boost non-profits.
Giving100 was created and funded by Independent Sector, a national membership organization that includes nonprofits, foundations, and corporations. The American Heart Association is a member of the Independent Sector.