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Congress Introduces Bill to Revolutionize Philanthropy

August 27, 2018

When Americans picture a "philanthropist," they typically imagine a very wealthy individual — someone who gives billions of dollars away or establishes their own foundation.

Unfortunately, our tax code reinforces this stereotype by providing only the wealthiest Americans with tax benefits for giving back. Only taxpayers who itemize their deductions — those typically in the highest tax brackets — can lower their income taxes by giving to charity. Currently, about 30 percent of taxpayers fall into this category, but with the recent tax reform this number could drop to as low as 5 percent.

That would leave 95 percent of Americans who are denied the opportunity to lower their taxes by giving to charity. A bipartisan group of U.S. representatives has set out to prevent that.

FGA_image_0

On July 26, 2018, Rep. Erik Paulsen (R-MN) introduced a bill along with five co-sponsors that would help redefine the way America gives back by empowering a new class of Everyday Philanthropist.

The Everyday Philanthropist Act (H.R. 6616) seeks to empower working Americans to give back through a Flexible Giving Account (FGA). An FGA is a pre-tax payroll deduction for employee giving. Non-itemizers and itemizers alike would be able to set up an FGA through their employer, set aside a portion of their paycheck pre-tax to be donated to the charity of their choice, and immediately see their taxable income reduced. The employer would benefit as well from a reduction in its payroll taxes.

By empowering millions more Americans to give back, the legislation would dramatically increase charitable giving in the U.S. But the Everyday Philanthropist Act offers more than that.

The legislation represents a chance to initiate a major shift in the way America gives back. The FGA would encourage a culture of shared responsibility in the workplace, one in which employers assume a more impactful role in empowering their employees and the workplace is transformed into a community where employees at every income level feel inspired to give and engage.

With an FGA, tax-deductible giving would no longer be a privilege reserved for a select few. Instead, it would be an opportunity, attainable by all working Americans, to come together and create a positive impact in the communities they care about.

As a champion of the Everyday Philanthropist Act, The Greater Give will continue to work with members of Congress to encourage them to join Representative Paulsen in supporting this legislation and the millions of charities, businesses, and Americans who would benefit from it. The legislation has already garnered public support from many in the charitable sector, including Community Health Charities, America's Charities, and the Wisconsin Philanthropy Network.

To learn more about the Everyday Philanthropist Act and what you can do to support it, visit thegreatergive.org or follow The Greater Give on Twitter, Facebook, and LinkedIn.

Headshot_dan_rashke2_for_philantopicDan Rashke is the Founder of The Greater Give, a 501(c)(6) formed to increase charitable giving by cultivating a movement of shared responsibility between employers and their employees. Rashke also is the CEO of TASC, a third-party benefits administrator based in Madison, Wisconsin.

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Why not include gifts to donor advised funds that might be reclassified as FGAs, but with a time limit for gifts to qualified charities 501 (c) (3)s to require sponsors to get charitable dollars where it can serve a public purpose.

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