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United Way Blog

No Taxation on Charitable Donations!

United Way is a 501(C)(3) nonprofit charity, meaning that the funds we raise go to supporting our community mission. Our work is fueled almost 100% by donations and carried out by a limited number of employees and a robust volunteer force. And while we appreciate our donors and the work we are privileged to do, we recognize that there is currently a lot more work to do in the face of extreme unemployment rates, food lines and social and economic inequality.

Since our founding, United Way has helped children get strong starts to their educations, supported veterans transitioning back to civilian life, provided job training and reskilling to help people access work. We step forward to fight each community’s toughest problems. The past few months have been no different.  We have raised more than $750 million so far in support of COVID-19 response and recovery efforts.  Those funds will be dispersed back into our communities, particularly communities of color who have been disproportionately impacted by the coronavirus and the following economic crisis. United Way has provided food, shelter, transportation, mental health resources and childcare.  But the need will outstrip these resources quickly and the need will continue far beyond the immediate fundraising surge that is common, but short-lived, in the case of disasters and crises.

What many people may not know is that funding to nonprofits has been struggling in recent years.

One reason is recent changes to the charitable deduction. The charitable deduction allows Americans to deduct charitable donations from their taxes when they file each year. However, changes in the 2017 tax law meant that fewer people were able to use the charitable tax deduction.  In fact, only about 10% of people will be relieved of taxes on their donations. 

However, the recently passed CARES Act restores the deduction so that all filers can access it, but limits it to $300.  This is a good start.  We know that people give because they care about their communities, but the deduction allows people to give more.  As a matter of fairness, United Way does not believe that people should be taxed on their generosity based only on their income level or tax filing status. The charitable tax deduction is a win-win-win: more money for the taxpayer, funding for charities and less burden to the government to provide social services.  

On June 2, 2020 United Way was pleased to host supporters Senator Chris Coons (D-Del.), Senator Amy Klobuchar (D-Minn), Senator James Lankford (R-Okla), Senator Mike Lee (R-Utah) and Senator Jeanne Shaheen (D-NH) for a meeting with thousands of members of the nonprofit community for a discussion titled: From Common Ground to Congressional Action,  Advancing the Universal Charitable Deduction.  Click here to watch the recording. These five U.S. Senators listened and shared stories from their own communities and agree that the charitable deduction should be expanded. United Way is in full support of that expansion and we hope that you agree, “No taxation on charitable donations!”

On June 18, scores of United Way staffers will be meeting with their Members of Congress to update them on the critical work underway in their local communities. They will provide updates on the health, education and economic systems of their states, the well-being of their citizens. They will also be talking to the Senators about the charitable deduction and the benefit that its expansion would have on their work and their communities.

Please join me, United Way, and the entire nonprofit community in our efforts to expand the charitable tax deduction. You can do this by contacting your local Congressional office here and let them know, “No taxation on charitable donations!”  Thanks for joining us in our efforts to support communities everywhere to recover, reimagine and rebuild to make a better tomorrow for more people everywhere.

Inspired by what you read? Change starts with you. Take action today to make a difference in your community.