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Congress Looks To Support Charities With Tax Breaks

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Congress Looks To Support Charities With Tax Breaks

Last year, Americans gave an impressive $450 billion to charity, but the numbers of donors are dwindling as COVID-19 hints at a global resurgence.

A bipartisan effort is underway to expand tax breaks for Americans in an effort to spur donations to nonprofit organizations.

Tackling A Common Issue: In March, the IRS extended the deadline for filing tax returns from April 15 to July 15. This effort was coupled with a small tax break developed around the same time to incentivize citizens to give more money to charity funds.

Sens. Jeanne Shaheen, a New Hampshire Democrat, and James Lankford, an Oklahoma Republican, are leading the charge to widen that opportunity, the Wall Street Journal reported last week. 

Backed by organizations such as Habitat for Humanity and the YMCA, Shaheen and Lankford want to encourage the middle class to contribute to the shrinking pool of nationwide donors to bail out struggling organizations. 

In one instance, the Minnesota Historical Society, a nonprofit that oversees the state’s cultural sites and museums, laid off almost 200 workers — a third of its staff, according to the StarTribune. 

Habitat for Humanity axed 10% of its staff,and its executives stopped receiving pay amid the crisis.

With more donations, nonprofits could rehire some of their laid-off workers. 

The Pushback: Not everyone agrees with the call for what essentially can be defined as a larger tax cut proposal.

In the Silicon Valley, the wealthy have been taking advantage of amassing large sums of money into “waiting room” charity funds without actually redirecting the money toward nonprofits. 

The Silicon Valley Community Foundation has been a leading example of this phenomenon, managing a staggering $13.5 billion in assets since its inception in 2007. This structure lets wealthy executives benefit immediately while they develop a strategy for their money. 

Nicole Taylor, the foundation’s president, is taking steps to change that philosophy and nudge donors to make immediate decisions to get nonprofits the funding they need, the Mercury News reported.

 

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