The American people are the most charitable people in the world, donating money, food and clothing in times of need. Their donations ensure that charities and foundations can help individuals and communities across the country. There are numerous provisions in the tax code that encourage giving, and the bill we have before us today, H.R. 4719 – the America Gives More Act – ensures that some of these provisions are made permanent, so individuals, businesses and farmers can donate and give back more.
The first provision will make permanent and expand the charitable deduction for contributions of food inventory by businesses regardless of how they are organized. Food banks are a vital part of communities, helping Americans put food on the table and provide for their families when they have come across hard times or suffered through a natural disaster. The Food Donation Connection has estimated that since this tax deduction was expanded in 2006, donations have increased 127 percent. Unfortunately, a provision in current law that encouraged pass-through businesses to contribute food inventory expired at the end of last year, and charities and foundations across the country are urging that it be restored and made permanent. According to Feeding America, “3.6 billion pounds of food is distributed by food bank members each year. This legislation would significantly increase food bank access to the 70 billion pounds of nutritious food wasted each year…”
Today, we have the opportunity to continue this important credit, allowing all businesses and farmers to take advantage and donate more nutritious food to the millions of Americans who need it most.
This bill also ensures that seniors who donate to charities from their Individual Retirement Accounts can do so without a tax penalty. According to the Independent Sector, this provision has “prompted more than $140 million in gifts to the work of nonprofits since enactment, assisting social service providers, religious organizations, cultural institutions and schools, and other nonprofits.” Making this provision permanent can only serve to increase the generous donations that charities rely on.
In addition, the bill will make permanent the deduction for contributions of conservation easements. This provision will also increase the amount of land or property donated for charitable use. Witnesses before the Ways and Means Committee have testified that in the first two years of the enactment of conservation easements, the number of donations doubled compared to the previous two years – resulting in a 32 percent increase of acreage conserved.
The tax reform draft the Committee produced earlier in the year would encourage charitable giving in several important ways, and, by creating a stronger economy, analysis found that it would increase charitable giving by an estimated $2.2 billion per year. Two important charitable provisions from the draft, lowering the excise tax on private foundations and extending the tax deadline for charitable contributions from December 31 to April 15, are included in the America Gives More Act.
At the end of the year, many taxpayers have no idea what their tax liability will be, and it is only after struggling through the daunting process of preparing their tax return that they know with certainty. If taxpayers were permitted to make and deduct contributions prior to filing their tax return, I believe many Americans will be even more generous in supporting religious and charitable causes. Testimony before the Ways and Means Committee found that allowing donors to deduct gifts until April 15 would result in significantly more charitable giving.
Another provision from the draft would lower and simplify the excise tax on private foundations making compliance easier, especially for smaller foundations. As a result, foundations will have more of their resources available to support charities and exempt organizations across the country.
All of these provisions are bipartisan, and have the support of over 850 charities and foundations across the country, who wrote to Congress stating that “Without an incentive in place and assured, many of the gifts the [charitable] incentives were intended to promote will simply not take place.”
The goodwill of the American people is unmatched, and we should do everything we can to encourage Americans to give more, enabling charities, nonprofits, foundations and schools across the country to expand their reach and serve those most in need. A yes vote on this bill is a vote for hardworking Americans who selflessly lend a hand every day to their neighbors, communities and others in need.