Position Statement

INDEPENDENT SECTOR Policy Position
on the Charitable Deduction for Nonitemizers

Since its creation, INDEPENDENT SECTOR has supported extending the charitable deduction to the 70% of taxpayers who do not itemize on their tax returns. Such a provision was part of federal tax law from 1982 to 1986, but contained a sunset provision and was not retained in law. President Bush has proposed reinstatement of the charitable deduction with no floor and with a ceiling equivalent to the standard deduction.

INDEPENDENT SECTOR strongly supports the charitable deduction for nonitemizers as a means to increase charitable giving and to allow all Americans, particularly those of modest means, to deduct their charitable contributions from their income for tax purposes. This proposal will support the work of America’s nonprofit organizations in serving the public good and it will “democratize” charitable giving by giving all Americans a similar encouragement through the tax code to contribute.

Specifically, IS supports the President’s proposal for the charitable deduction both because it will have a very strong stimulus effect on charitable giving, and because it brings greater fairness to the tax code for those who make charitable contributions. A study done for IS by PricewaterhouseCoopers indicates that this proposal could increase giving by $14 billion per year and could stimulate 11 million new givers.

Many Americans give generously, and all Americans should be able to deduct their charitable contributions from their taxable income. Tax policy should strongly encourage giving by all Americans. Individuals who give to charity are foregoing private consumption and voluntarily giving those resources to the public good. As such, charitable contributions should not be considered as part of an individual’s taxable income. 

The charitable deduction for nonitemizers benefits primarily low and middle-income taxpayers, both with a tax cut and with a stimulus to new and increased giving. This initiative reflects the basic value proposition that all Americans should be encouraged to give and should be recognized for their giving. Thus, IS strongly supports the charitable deduction for nonitemizers to encourage giving by all Americans.

Adopted by the INDEPENDENT SECTOR Board of Directors, March 2001

Download INDEPENDENT SECTOR's Guiding Principles for Public Policy on Charitable Giving (PDF--49KB) Press Release

INDEPENDENT SECTOR Policy Position Statements on:
Estate Tax and Charitable Bequests
Charity Tax Credits
IRA Charitable Rollover