Americans gave nearly $450 billion to charity last year — one of the highest amounts on record — as lawmakers seek options to expand tax breaks for donors amid the coronavirus pandemic.
Charitable giving rose 2.4% in 2019, after adjusting for inflation, according to an annual survey by Giving USA released Tuesday. Individual giving accounted for about 69% of all donations, but the biggest increase was by corporations. Businesses gave about $21 billion last year, an increase of 11.4% from 2018, once adjusted for inflation. Giving by foundations also reached a record high of $75.7 billion.
“In recent years we’ve seen a consistent and growing trend in giving by foundations comprising a larger share of total giving than it did 15 years ago,” Amir Pasic, dean of the Lilly Family School of Philanthropy at Indiana University, said in a statement. “This change may reflect larger trends such as in the distribution of wealth and in asset growth across a decade of stock market expansion.”
The boost in charitable giving comes as lawmakers have been contemplating expanding tax breaks for charitable donations after the 2017 tax overhaul curbed the availability of some of those deductions and the coronavirus pandemic has forced many nonprofits to cut staff and cancel fundraisers while need is growing.
In March, lawmakers included a measure in the cornanvirus economic rescue bill that allows individuals to write off as much as $300 in donations for 2020 even if they don’t itemize their taxes. And there’s a bipartisan push from Senators Jeanne Shaheen, a New Hampshire Democrat, and James Lankford, an Oklahoma Republican, to make charitable deductions permanently available to all taxpayers.
Generally, deductions for charitable contributions are only permitted for individuals who itemize their tax returns, or add up all their individual tax breaks, such as those for state and local taxes, mortgage interest and charitable giving. Only about 10% of taxpayers do this, with the rest taking the standard deduction, which is $12,400 for 2020.
The number of people who itemize their taxes has fallen in recent years, after the 2017 overhaul increased the standard deduction, meaning fewer people would have to itemize, a more complex way to file taxes. Extending the tax break to non-itemizers would mean more middle-income taxpayers would benefit from the tax break.
This article was provided by Bloomberg News.
