A recent blog by Perry Wasserman on the National Association of Charitable Gift Planners website previewed a possible “flurry of legislative activity” in November and December that could change the way people make charitable gifts. Among them is the Everyday Philanthropist Act, a bill before the U.S. House of Representatives that would allow donors to create flexible giving accounts in the same way people use flexible spending accounts.
Some estimate that, depending on tax brackets, flexible giving could increase gift amounts by 30% with no impact on the donor’s pocketbook.
Introduced by Representative Erik Paulsen (R-MN), the premise behind the Everyday Philanthropist Act is that it would enable everyday, working Americans to give to the organizations and communities they care about by allowing them to set up Flexible Giving Accounts, or FGAs, through their employers. If the measure passes, employees could contribute up to $5,000 via a pre-tax payroll deduction, which would then be distributed to qualified charities.
Proponents of the bill say FGAs would allow millions more Americans to receive immediate tax benefits for their charitable donations. It also would benefit employers by lowering payroll taxes. At the same time, charities could see a significant increase in their donations.
The bill, which is cosponsored by Representatives Ami Bera (D-CA), Cheri Bustos (D-IL), Mike Gallagher (R-WI), Mark Pocan (D-WI), Tim Walberg (R-MI), and Sean Duffy (R-WI), appears to have bipartisan support. Go here to read the legislation.
By Kevin Bauman, Director of Philanthropic Initiatives, Capture Higher Ed