Currently, only Americans who itemize their tax returns are eligible to take their charitable donations as tax deductions. Those who take the standard deduction -- nearly two-thirds of all Americans -- are generally ineligible to take tax deductions from charitable giving.
The Everyday Philanthropist™ Act [H.R. 4002] would create a new federal program called Flexible Giving Accounts (FGA), a pre-tax payroll deduction for employee giving, thereby providing a tax break to any American who donates to charity.
The Everyday Philanthropist Act
When it comes to charitable giving incentives, our current tax code exclusively benefits the wealthy: about 70 percent of Americans do not itemize their taxes, and thus cannot receive tax benefits for their altruism.
Yet we know Americans at all income levels are incredibly generous and want the agency to change the world around them. We also know that workplace giving is the most efficient and effective way of providing that agency, simultaneously giving back while improving the communities in which they live and work.
But there's a way to even the playing field by empowering taxpayers to donate to charity on a pre-tax basis: with the Everyday Philanthropist Act, which seeks to empower working Americans to give to charity.
- On July 26, 2018, the Everyday Philanthropist Act, H.R. 6616, was first introduced in the House of Representatives, sponsored by Rep. Erik Paulsen (R-MN) with six co-sponsors, during the 115th Congress. Unfortunately, that effort fizzled out.
- Luckily -- nearly a year later to the day -- on July 25, 2019, the Everyday Philanthropist Act (H.R. 4002) was reintroduced in the House of Representatives during the 116th Congress (this session) by sponsors Tom Suozzi (D-NY) and Vern Buchanan (R-FL), co-sponsored by 10 others. It was quickly referred to Ways and Means Committee, where it sits now.
- In the following days (as of today, August 2, 2021), for the first time in history, the Everyday Philanthropist Act, a Senate companion bill is slated to be introduced, sponsored by Tammy Baldwin (D-WI) and Ben Sasse (R-NE).
Specifically, the Everyday Philanthropist Act allows employers to offer certain employees a tax-advantaged flexible giving account, allowing employees to set aside up to $2,700 of their annual pretax earnings to make tax-deductible charitable contributions without having to itemize tax deductions.
In short, the bill would greatly increase the number of Americans who could take a tax break through charitable donations. Indeed, research shows that 95 percent of working Americans would be afforded the same benefits of giving that only the wealthiest donors currently have.
"[The current tax code] establishes an unfair correlation between wealth and one’s ability and desire to give back, when in fact all Americans want to have an impact on their communities. The Everyday Philanthropist Act is a win for taxpayers, employers, charities, and Congress." -- The Greater Give
The Everyday Philanthropist Act means:
- Millions more Americans could lower their taxes through charitable giving.
- Employers could empower their employees to give back while reducing payroll taxes.
- Charities could increase donations and impact communities in need.
Add your name to the Greater Give's list of supporters.
Write to your members of Congress and tell them you support the Everyday Philanthropist Act, the first step in redefining the way America gives back.
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