News for Nonprofits

Push continues for universal charitable deduction

Nonprofits remain worried about the effects of the federal income tax overhaul on charitable giving. But some organizations, such as the Council on Foundations and Independent Sector, intend to keep the pressure on Congress to help mitigate the damage.

Federal lawmakers already have taken some steps to alleviate the potentially negative repercussions. In 2018, for example, Rep. Chris Smith (R-NJ) introduced the “Charitable Giving Tax Deduction Act,” which would allow taxpayers to deduct from gross income charitable contributions that are now allowed only as an itemized deduction. The bill is supported by a consortium of charitable organizations and philanthropic networks and has drawn five bipartisan sponsors in Congress since its introduction.

In the Senate, Sen. James Lankford (R-OK) has introduced similar legislation — dubbed the “Universal Charitable Giving Bill.” While Smith’s bill wouldn’t limit the deduction, Lankford’s would cap it at one-third of the taxpayer’s standard deduction.

Funders turning to competitions

More and more big funders — including private companies, government agencies and other nonprofits — are staging competitions to determine where best to direct their dollars. As the business magazine Fast Company reports, a variety of entities are experimenting with everything from prize competitions and challenges to “hackathons.”

Major funders like the Rockefeller Foundation, Bloomberg Philanthropies, the MacArthur Foundation and the Chan Zuckerberg Initiative (CZI) have hosted competitions to find groups with effective formulas or concepts that might otherwise go unnoticed. For example, the Rockefeller Foundation and CZI teamed up on the Communities Thrive Challenge, paying out $1 million each to the 10 winning community groups that proposed scalable ways to build greater economic opportunity for low-income and financially insecure people in their areas. More than 1,800 organizations participated.

Study links lack of trust in government with use of nonprofit services

Opinions and attitudes about government may influence the use of nonprofit services by individuals in need. A new analysis of the Human Needs Index (HNI) by researchers at the Indiana University Lilly Family School of Philanthropy found that states with lower levels of trust in government had higher levels of need as measured by the HNI.

When a state’s citizenry is less trusting of government, they prefer lower government spending on programs such as welfare and Social Security, and they’re more likely to turn to a nonprofit to meet basic human needs. The effect goes both ways — when state-level trust in government is higher, use of nonprofit services is lower.