On Sunday, April 14, MCN joined Senator Klobuchar, the Minnesota Council on Foundations, the Women’s Foundation of Minnesota, and the East Side Freedom Library for a press conference to promote The Charitable Act (S.566/H.R. 3435) that would create a universal charitable deduction at the federal level.
For over a century, our tax system has encouraged Americans to give back to their communities by providing tax deductions for contributions to charitable organizations. But this culture of giving is at risk.
“Our sector is essential, yet MCN’s most recent nonprofit impact report highlights a dire need – as community demands continue to increase, critical financial donations have decreased,” said Nonoko Sato, MCN’s executive director, at the press conference. “In fact, according to Giving USA’s 2023 report, individual giving adjusted for inflation, has declined 13.4% in 2022, only the fourth time that donations have fallen in the last 40 years.”
The Charitable Act, at its core, is about building stronger and more resilient communities. By recognizing and incentivizing charitable contributions, governments signal their support for the critical role that nonprofits play in delivering essential services, fostering innovation, and building stronger communities.
“The Charitable Act acknowledges the importance of nonprofits by making it easier for donors to direct their contributions to causes and organizations they are passionate about. This flexibility encourages innovation, pursuits of new approaches, and enables nonprofits to quickly respond to emerging challenges and adapt their programs to meet evolving community needs.”
And there is evidence that legislation like the Charitable Act works. United Philanthropy Forum reported that a temporary version of a Universal Charitable Deduction in 2020 led to more than 35% of all non-itemizers claiming the special $300 deduction, that’s 42.5 million taxpayers generating $11 billion in charitable giving that year.
As we all know here, Minnesotans are generous people and we continue to rank at or near the top of every measure of charitable giving, volunteerism, and civic engagement. This legislation would encourage more giving from middle- and lower-income families who are not incentivized by the current charitable deduction because they do not itemize their deductions.