Congress should remove roadblocks to generosity for nonprofits

Congress is currently considering the fourth, and likely final for the foreseeable future, COVID-19 relief package. Each chamber submitted its proposal to aid the American economy and those impacted by the coronavirus pandemic. Recently, the U.S. Senate released the HEALS Act (Health, Economic Assistance, Liability Protection, and Schools), and the House of Representatives passed their relief package entitled the ‘HEROES Act (Health and Economic Recovery Omnibus Emergency Solutions Act). Currently, both chambers and White House officials are negotiating and ironing out the final text.

While there are many meaningful priorities in a pandemic, Congress should not overlook removing hurdles that discourage giving to the nonprofit sector. Every corner of society feels the effects of COVID-19, but vulnerable communities have been disproportionately hurt. Issues such as food insecurity and unemployment weigh heavily on the hearts and minds of thousands across America, and they are the lived realities of too many of our neighbors. Charities and nonprofits are on the frontlines serving our nation’s most vulnerable and those most impacted by the pandemic. The charitable sector is providing essential care and resources for the unemployed, the elderly and the vulnerable. Houses of worship provide hope and community to people who are hurting and searching for meaning during this difficult season. 

Not only do these nonprofits and houses of worship provide valuable physical and spiritual care, but nonprofits are also the third largest employer in the U.S. economy. This sector employs approximately 12.5 million people or 10 percent of those working in the private sector. 

The charitable sector isn’t immune to the economic impacts of the pandemic, and, unfortunately, many are suffering financially when there’s an increased demand for their services. Nearly 95 percent of nonprofits globally say they have been negatively impacted by COVID-19. Most nonprofits are funded through private donations, and many donors aren’t able to give as consistently or as generously as they previously were. No one is asking for the government to appropriate money in this realm. Nonprofits are already serving as they already have, and will. It is wise, though, to remove the roadblocks to the generosity of persons and families.

Sens. Chris Coons (D-Del.) and James Lankford (R-Okla.) introduced the Universal Giving Pandemic Response Act to encourage all Americans to give more to charity during these challenging times. The legislation would ensure that Americans who donate to charities, churches, religious organizations and other nonprofits are able to deduct that donation from their federal taxes at a higher level than the current $300 deduction. Under the federal tax code, people can only claim a deduction for charitable contributions if they itemize their deductions. Since the amount of people who itemize deductions has shrunk, many nonprofits are concerned there would be a drop in donations, because of the lack of tax incentive to give. 

The bipartisan Universal Giving Pandemic Response Act would make available — for tax years 2019 and 2020 — an above-the-line deduction for charitable giving on federal income taxes valued at up to one-third of the standard deduction. The tax code affects financial behavior, and most tax deductions exist to encourage positive behavior. 

Now, more than ever, we need churches and charities to provide essential services and care to millions around the country. Without this action, many of these nonprofits might have to close their doors. Congress should prioritize ways to incentivize individual generosity so that the charitable sector and faith-based organizations can continue providing vital services for communities around the nation. The Universal Giving Pandemic Response Act is worthwhile legislation to do just that.

Chelsea Patterson Sobolik is a policy director for the Ethics and Religious Liberty Commission and is a former House aide who worked on pro-life, religious freedom, adoption, and foster care policy, and writing has appeared in USA Today, Christianity Today, and The Gospel Coalition. Follow her on Twitter @Chelspat.