Some worry the super-wealthy have too much sway in the world of charitable giving, especially in light of mega-donations like Amazon
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CEO Jeff Bezos’ recent $2 billion pledge become more common.
Now a proposed tax law aims to help solve that issue.
The Everyday Philanthropist Act would let employees donate to charity by taking money directly out of their paychecks, similar to how workers contribute to their 401(k) accounts. The act would let employees put up to $5,000 a year into a “flexible giving account.” Congressman Erik Paulsen, a Minnesota Republican, introduced the bill in August, joined by three Democrats and two Republican co-sponsors.
“Very few people get incentivized to give to charity through our tax code,” said Jennifer Zisser, director of The Greater Give, a Wisconsin-based nonprofit that’s advocating for the act. “The idea is really about making it accessible for working Americans.”
(The Greater Give was founded by the owners of TASC — the largest privately-held third-party benefits administrator in the U.S. — who obviously have an interest in advancing employer-sponsored giving.)
The Everyday Philanthropist Act is one of a handful of proposed bills designed to make tax laws more friendly to charitable giving. Others include the Universal Charitable Giving Act and the Charitable Giving Tax Deduction Act. Those bills would turn charitable donations into an “above-the-line” deduction, meaning that tax filers could easily list them on the first page of their tax forms instead of filing extra paperwork.
These proposals are motivated in part by the recent changes to the tax law, which nearly doubled the standard deduction for most taxpayers. That’s expected to lead to fewer people itemizing and, in turn, a big drop in donations to charity.
Meanwhile, the ultra-wealthy are exerting growing influence in philanthropy, with a larger share of the country’s charitable giving coming from donors like Bezos and other tech founders.
That’s why the Everyday Philanthropist Act gets a thumbs up from people like David Callahan, founder of the website Inside Philanthropy and author of “The Givers: Wealth, Power and Philanthropy in a New Gilded Age.”
“Giving by ordinary Americans has been going down over the past 10 or 15 years and, meanwhile, these very wealthy donors have been having more and more influence and it’s really important to try to turn that trend around and get more people giving,” Callahan told MarketWatch.
He added, “It’s similar to the idea in campaign finance reform circles that we need to bring more small donors into politics to amplify the voice of ordinary people and offset the voices of the very rich.”
David L. Thompson, vice president of public policy at the National Council of Nonprofits, said the Everyday Philanthropist Act is appealing because of its simplicity, but there are some “devilish” details that need to be worked out.
Turning charitable giving into an employer-sponsored benefit raises some questions, he said. Would administrative fees eat away at donations? Would employees worry that their employers are watching which groups they donate to? Could employers ban giving to certain groups like Planned Parenthood or the National Rifle Association?
That said, Thompson’s group supports the act, and any other efforts to increase giving to charity. “We’re in favor of addressing the problem, which is that the tax law removes incentives for giving,” Thompson said.
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Source : MTV
