The amount you and your employees can save for retirement is going up slightly in 2025 | tax accountants in washington dc | Weyrich, Cronin & Sorra

The amount you and your employees can save for retirement is going up slightly in 2025

How much can you and your employees contribute to your 401(k)s or other retirement plans next year? In Notice 2024-80, the IRS recently announced cost-of-living adjustments that apply to the dollar limitations for retirement plans, as well as other qualified plans, for 2025. With inflation easing, the amounts aren’t increasing as much as in recent years.

401(k) plans

The 2025 contribution limit for employees who participate in 401(k) plans will increase to $23,500 (up from $23,000 in 2024). This contribution amount also applies to 403(b) plans, most 457 plans and the federal government’s Thrift Savings Plan.

The catch-up contribution limit for employees age 50 or over who participate in 401(k) plans and the other plans mentioned above will remain $7,500 (the same as in 2024). However, under the SECURE 2.0 law, specific individuals can save more with catch-up contributions beginning in 2025. The new catch-up contribution amount for taxpayers who are age 60, 61, 62 or 63 will be $11,250.

Therefore, participants in 401(k) plans who are 50 or older can contribute up to $31,000 in 2025. Those who are age 60, 61, 62 or 63 can contribute up to $34,750.

SEP plans and defined contribution plans

The limitation for defined contribution plans, including a Simplified Employee Pension (SEP) plan, will increase from $69,000 to $70,000 in 2025. To participate in a SEP, an eligible employee must receive at least a certain amount of compensation for the year. That amount will remain $750 in 2025.

SIMPLE plans

The deferral limit to a SIMPLE plan will increase to $16,500 in 2025 (up from $16,000 in 2024). The catch-up contribution limit for employees who are age 50 or over and participate in SIMPLE plans will remain $3,500. However, SIMPLE catch-up contributions for employees who are age 60, 61, 62 or 63 will be higher under a change made by SECURE 2.0. Beginning in 2025, they will be $5,250.

Therefore, participants in SIMPLE plans who are 50 or older can contribute $20,000 in 2025. Those who are age 60, 61, 62 or 63 can contribute up to $21,750.

Other plan limits

The IRS also announced that in 2025:

  • The limitation on the annual benefit under a defined benefit plan will increase from $275,000 to $280,000.
  • The dollar limitation concerning the definition of “key employee” in a top-heavy plan will increase from $220,000 to $230,000.
  • The limitation used in the definition of “highly compensated employee” will increase from $155,000 to $160,000.

IRA contributions

The 2025 limit on annual contributions to an individual IRA will remain $7,000 (the same as 2024). The IRA catch-up contribution limit for individuals age 50 or older isn’t subject to an annual cost-of-living adjustment and will remain $1,000.

Plan ahead

The contribution amounts will make it easier for you and your employees to save a significant amount in your retirement plans in 2025. Contact us if you have questions about your tax-advantaged retirement plan or want to explore other retirement plan options.

© 2024

 

Giving season’s here! It’s time to engage donors | accounting firms in baltimore | Weyrich, Cronin & Sorra

Giving season’s here! It’s time to engage donors

The end of 2024 is rapidly approaching, and you know what that means: You need to fundraise in earnest. According to Double the Donation, 30% of all charitable giving occurs in December. Make sure your not-for-profit organization is top of mind when people pull out their credit cards and checkbooks.

Improve visibility

Only donors who itemize deductions on their 2024 federal income tax return can deduct donations made by Dec. 31. But plenty of others are motivated by the “holiday spirit” to give. And some prospective donors may simply use the calendar as a reminder to make their charitable contributions for the year. To help ensure the charitably minded know you want — and need — their support:

Take part in Giving Tuesday. Since launching in 2012, Giving Tuesday has grown swiftly to become one of the world’s biggest fundraisers. The online event is held on the first Tuesday after Thanksgiving — Dec. 3 in 2024. In 2023, 34 million Americans participated by volunteering and donating, including giving $3.1 billion to nonprofits. If you aren’t set up to participate, go to givingtuesday.org for information.

Focus on a theme or goal. Create a giving campaign around a fun participatory theme (one example being the ALS Association’s Ice Bucket Challenge). Or focus on a specific goal, such as constructing a new facility or introducing a new program.

Check your records. Reach out to supporters whom your records reveal have habitually made year-end contributions. You can also segment your donor database according to gift size and other characteristics that suggest some past donors may be more willing to give now.

Share your stats. Analytics can engage and motivate nonprofit stakeholders, so use statistics and infographics in your year-end appeals. Stats can illustrate your organization’s historical fundraising patterns and current goals. If you update them on your website, supporters will be able to follow your progress through a particular season or campaign.

Be prepared

Attracting support is only part of a successful fundraising season. You also have to make sure you’re equipped to handle donations.

To that end, test the donation page on your website to confirm it’s easy to navigate and ready for donors to input financial information. Your site should adhere to the highest security protocols, load quickly, and be free of dead links and error messages. Ensure your donation app sends emails to thank donors and provide them with a record for tax purposes.

Also critical: being ready to process any available matching gifts. According to Double the Donation, most companies that offer to match their employees’ charitable gifts donate at a 1:1 ratio — but some are known to go as high as 4:1. You can’t afford to miss out! Provide contributors with instructions on how to request matches. Also, set up automated emails to remind donors if you don’t receive a match.

Learn from success

Finally, be sure you document everything you learn — including what works and what doesn’t — this giving season. Contact us for more ideas on boosting your nonprofit’s income.

© 2024

 

Don’t let fraudsters ruin the most wonderful time of the year | business consulting services in baltimore county md | Weyrich, Cronin & Sorra

Don’t let fraudsters ruin the most wonderful time of the year

The hubbub of the year-end giving season, combined with holiday absences, can make your not-for-profit vulnerable to fraud. You’ll need to be particularly vigilant if you generally rely more on volunteers this time of year, hold special fundraising events or intend to give gift cards to staffers and clients. Here’s what to look out for.

Care with cash

Charities generally are staffed by people who believe strongly in their missions. This typically contributes to a culture of trust, which can make nonprofits vulnerable to certain types of fraud. For example, staffers and volunteers may be trusted to accept cash, making it easy for crooked individuals to pocket it. So ensure that a manager supervises anyone who accepts cash donations and keeps meticulous records of all cash received.

If you’re holding a special event this holiday season, minimize the risk of cash theft by preselling or preregistering participants. Also make sure you’re set up to accept credit cards at your event — and encourage credit card payments. If you decide to accept cash at the door, assign cash-related duties to employees who’ve undergone background checks or to trusted board members rather than unsupervised volunteers.

Segregation of duties

Regardless of how busy staffers are processing donations and completing year-end tasks, they need to observe internal controls such as segregation of accounting duties. To reduce opportunities for any one person to steal, involve several employees in processing payables and receivables. For example, every incoming invoice should be reviewed by the staffer who placed the order to confirm the amount and that the goods or services were received. A different employee should be responsible for processing the payment. And a third person (or outside financial advisor) should routinely review your books for any anomalies.

If staffers who usually carry out these responsibilities are on vacation, enlist the help of executives and board members. Don’t cut corners or allow control overrides because you’re operating without a full staff. Instead, you might look for tasks you can put on hold until everyone is back after the holidays.

Gift card risk

Gift card fraud is another potential holiday season risk. If you plan to give gift cards to staffers or clients, be careful about where you buy them. In a scam known as “draining,” fraudsters obtain bar codes, PINs and activation codes by opening gift cards on store display racks. After the crooks reseal the cards, consumers buy and add money to them and the thieves spend the funds before gift recipients get a chance to.

Buy cards only from stores with good security — including security cameras on gift card racks. Also inspect cards for signs of tampering and promptly give them to your recipients, encouraging them to use the cards soon.

Holiday spirit

The period between Thanksgiving and New Year’s Day generally is a critical fundraising season. Don’t let fraud undermine all your hard work and eat into your nonprofit’s revenues — not to mention, ruin your holiday spirit. Contact us for help establishing or strengthening internal controls.

© 2024

 

Fundamental differences between nonprofit and for-profit accounting | Quickbooks consulting in bel air md | Weyrich, Cronin & Sorra

Fundamental differences between nonprofit and for-profit accounting

You may know the difference between nonprofit and for-profit accounting systems, but do your newest employees and board members? Not-for-profits and businesses share certain similarities. For example, both must carefully track transactions and produce accurate, timely financial statements. But there are enough differences between the two that you may want to provide training for new board members and staffers who come from corporate backgrounds.

Profit vs. charitable mission

For-profit companies are driven to maximize profits for their owners. Nonprofits, on the other hand, generally want revenue to cover the costs of fulfilling their mission now and in the future.

Their respective financial statements reflect this difference. For-profits report mainly on profitability and increasing assets, which correlate with future dividends and return on investment to owners and shareholders. Nonprofits report on their financial position, stability and expenditures to funders, board members, the community and tax authorities.

Balance sheet vs. statement of financial position

For-profits and nonprofits use different financial statements to report assets and liabilities. For-profit companies prepare a balance sheet that lists the owners’ or shareholders’ equity, which is based on the company’s assets, liabilities and prior profits.

Nonprofits, which have no owners, prepare a statement of financial position, which also looks at assets, liabilities and prior earnings. Resulting net assets are classified as those without donor restrictions and those with donor restrictions. Nonprofits usually are more focused on transparency than are for-profit companies. Therefore, their financial statements and footnotes generally include disclosures about the nature and amount of donor-imposed restrictions on net assets, as well as internal limits set by the board.

Income statement vs. statement of activities

For-profits and nonprofits also take different reporting approaches to revenues and expenses. For-profits produce an income statement (also known as a profit and loss statement), listing revenues, gains, expenses and losses, to help evaluate financial performance.

Nonprofits often rely on grants and donations, in addition to fees-for-service income. So they prepare a statement of activities, which lists all revenues less expenses, and classifies the impact on each net asset class.

Unlike for-profit businesses, nonprofits also prepare a statement of functional expenses. Here, they break down their expenditures (such as salaries and benefits, rent and utilities, and office supplies) into functional categories — program, administration (also referred to as management) and fundraising. This statement often is used to help nonprofits prepare their annual Forms 990 and can provide greater transparency to their donors and supporters.

Other differences

There are other nonprofit financial reporting and accounting concepts that may be important for staffers and board members to learn, depending on their responsibilities. If you have questions or need help educating your stakeholders, contact us.

© 2024

 

Welcome charitable pledges — and account for them properly | CPA in cecil county md | Weyrich, Cronin & Sorra

Welcome charitable pledges — and account for them properly

The difference between financial pledges and donations is relatively simple: Pledges are promises to donate sometime in the future, and donations provide immediate support for your not-for-profit organization. What’s not so simple is accounting for pledges. After all, a promise to donate isn’t a guarantee that you’ll receive the money when the contributor says you will — if at all — or in the amount pledged.

Unconditional is a green light

Let’s say a donor makes a pledge in September 2024 to contribute $10,000 in January 2025. You generally will create a pledge receivable and recognize the revenue for the September 2024 financial period. When you receive the donation in January 2025, you’ll apply it to the receivable. No new revenue will result in January because the revenue already will have been recorded.

However, you can’t recognize the revenue unless the donor has made a firm commitment and the pledge is unconditional. This means the donor has committed to the pledge without reservations. Several factors might indicate an unconditional pledge, for example, if the promise includes a fixed payment schedule or the amount can be determined. Unconditional promises also typically include words such as “promise,” “pledge,” “binding” and “agree” — as opposed to “plan,” “intend” and “hope.”

Conditional warrants caution

What about conditional promises? They could include a requirement that your organization complete a particular project before receiving the contribution or that you send a representative to an event to receive the check in person. Matching pledges are conditional until the matching requirement is satisfied, and bequests are conditional until after the donor’s death.

You generally shouldn’t recognize revenue on conditional promises until the conditions have been met. Recording a conditional pledge could be acceptable if the odds of a condition going unfulfilled are remote. Say, for example, that a donor makes a pledge with a condition that your nonprofit still exists in five years. If your organization has been in a solid financial position for 10 years and has no plans to close, you’ll probably be able to satisfy this condition.

Support and recognize promises

Whether a pledge is conditional or unconditional, your accounting department will need written documentation to support a pledge before recording it. The strongest evidence is a signed agreement with the donor that details the pledge’s terms, including the amount and timing. If pledges come up often, you might want to develop a standard pledge template to use with all pledge donors. (Note that reluctance to sign such an agreement could be reason to question a donor’s commitment, and you might not want to record the pledge.)

To reflect the time value of money, pledges must be recorded at their present value, as opposed to the amounts your nonprofit expects to receive in the future. For pledges you’ll receive within a year, you can recognize the pledged amount as the present value.

If a pledge will be received further in the future, though, present value is calculated by applying a discount rate to the amount your organization is expected to receive. The discount rate is usually the market interest rate — or the rate a bank would charge you to borrow the amount of the pledge. Additional entries will be required to remove the discount as time elapses.

Your fundraising strategy

It’s understandable if your organization prefers outright donations to pledges. But pledges can play a valuable role in your fundraising strategy because they’re generally for larger amounts. Also, donors tend to have longer relationships with nonprofits to which they pledge. Contact us for advice about accounting for pledges properly.

© 2024

 

When your nonprofit’s debt-financed income is subject to tax | Tax accountant in baltimore MD | weyrich, cronin and sorra

When your nonprofit’s debt-financed income is subject to tax

If your nonprofit has investment income, dividends, interest, rents and annuities, they’re generally excluded when calculating unrelated business income tax (UBIT). However, income from debt-financed property typically is taxable. So it’s important to segregate income from such property and include it in UBIT calculations to help ensure you don’t trigger unwanted IRS attention.

What counts as UBI?

Income produced from debt-financed property generally is taxable unrelated business income (UBI) in the same percentage as the debt is to the full acquisition cost. This means that 75% of any income or gain from a property with a loan for 75% of its cost will usually be taxable UBI.

The most common type of income-producing debt-financed property for nonprofits is probably real estate — for example, an office building with income from rents unrelated to your nonprofit’s mission. But such property might also include stocks or other investments purchased with borrowed funds.

Income-producing property generally is treated as debt-financed for UBIT purposes if, at any time during the tax year, it had outstanding “acquisition indebtedness.” So if your nonprofit incurred debt before, during or shortly after it acquired or improved property (but wouldn’t otherwise have incurred debt), the property may be considered acquisition indebted.

What doesn’t count?

Some types of debt-financed property aren’t considered when calculating UBIT:

Property related to your exempt purpose. If 85% or more of the use of the property is substantially related to your nonprofit’s exempt purposes, it won’t be considered debt-financed property. Therefore, income from the property won’t be taxable. Simply using the income to support your programs doesn’t make the property related to your organization’s exempt purpose. The property must be used in providing program services.

Property used in certain excluded activities. This is property used in a trade or business that’s excluded from the definition of “unrelated trade or business.” That’s either because it’s used in research activities or because the activity has a volunteer workforce, is conducted for the convenience of members, or operates to sell donated merchandise.

Real property covered by the neighborhood land rule. Your nonprofit must acquire the real estate intending to use it for exempt purposes within 10 years. Also, the property usually must be connected to other property your organization uses for exempt purposes. Favorable treatment will no longer apply if you abandon your intention to use the land for exempt purposes.

Who should you ask?

There are other circumstances when dividends, interest, rents, annuities and other investment income may be taxable — for example, if it’s paid directly from a subsidiary your nonprofit controls. Determining if and when income is subject to UBIT can be difficult. We encourage you to contact us for information and help.

© 2024

 

Get the word out about IRA qualified charitable distributions - Accountant in cecil county md - Weyrich, Cronin & Sorra

Get the word out about IRA qualified charitable distributions

The SECURE 2.0 Act made some enhancements to IRA qualified charitable distributions (QCDs) that may benefit your not-for-profit organization — so long as donors know about them. You can encourage your supporters to contribute more by boning up on the new rules and communicating their tax advantages.

QCDs to RMDs

First, the basics: QCDs were established in 2006 and became permanent in 2015. Taxpayers age 70½ or older are allowed to make QCDs up to an annual limit from their IRAs directly to a qualified charity.

A charitable deduction can’t be claimed for a QCD, but the QCD amount is excluded from the donor’s taxable income. And the QCD can be used to satisfy the IRA owner’s required minimum distribution (RMD), if applicable.

SECURE 2.0 enhancements

SECURE 2.0, signed into law in 2022, includes some significant QCD enhancements. Beginning this year, what was previously a $100,000 annual distribution limit is now indexed annually for inflation — $105,000 in 2024.

SECURE 2.0 also created a new QCD opportunity starting in 2023. Taxpayers can make a once-per-lifetime QCD of up to $50,000, annually indexed for inflation ($53,000 in 2024), through a split-interest entity. These include charitable gift annuities, charitable remainder annuity trusts and charitable remainder unitrusts. Split-interest entities generally allow donors to make gifts to your nonprofit while creating an income stream for themselves. After a designated period of time, the balance goes to your organization.

As with regular QCDs, the amount of a split-interest entity QCD isn’t deductible, but it counts toward RMDs and isn’t included in the donor’s taxable income. Spouses can each make a QCD to the same split-interest entity to double the gift. Split-interest entities must pay a 5% minimum fixed percentage annually for the life of the donor or the donor’s spouse, and these payments are taxed as ordinary income.

Boost donations

How can you get the word out and boost donations? Consider preparing a presentation, brochure or both on how QCDs work, stressing the tax advantages for donors. A QCD might be especially tax-smart for donors who:

  • Can’t benefit from the charitable deduction because their total itemized deductions for the year won’t exceed the standard deduction for their filing status, or
  • Want to donate more to charity during the year than they can deduct due to adjusted gross income (AGI)-based limits on their charitable deduction. In general, deductions for cash gifts to public charities can’t exceed 60% of AGI and deductions for donations of long-term capital gains property to charities can’t exceed 30% of AGI.

But don’t limit your education campaign to these technicalities. Supporters increasingly are interested in outcomes. Be as specific as possible about how you’ll apply a donor’s QCD — for example, to fund a new program or facility or pay for additional staff.

Qualified recipients

Note that donor-advised fund sponsors, private foundations and supporting organizations continue to be ineligible as QCD recipients. Indeed, you should make certain that your nonprofit is allowed to accept — and is set up to receive — QCDs. Contact us for help.

© 2024

 

Nonprofit refresher course: Excess benefit transactions - business consulting services in elkton md - Weyrich, Cronin & Sorra

Nonprofit refresher course: Excess benefit transactions

Most not-for-profit leaders are familiar with the concept of excess benefit transactions and the need to avoid them. But a refresher course may be in order, particularly when you consider that 501(c)(3) organizations determined by the IRS to have violated the rules can be liable for penalties of 25% to 200% of the value of the benefit in question. They may also risk a revocation of their tax-exempt status — and, as a result, the loss of donor and community support.

Private inurement

To understand excess benefit transactions, you also need to comprehend the concept of private inurement. A private benefit is any payment or transfer of assets made, directly or indirectly, by your nonprofit that is:

  • Beyond reasonable compensation for the services provided or goods sold to your organization, or
  • For services or products that don’t further your tax-exempt purpose.

If any of your net earnings inure to the private benefit of an individual, the IRS won’t view your nonprofit as operating primarily to further its tax-exempt purpose.

Private inurement rules extend the private benefit prohibition to “insiders” or “disqualified persons” — generally any officer, director, individual or organization (including major donors and donor advised funds) in a position to exert significant influence over your nonprofit’s activities and finances. The rules also cover their family members and organizations they control. A violation occurs when a transaction that ultimately benefits the insider is approved.

Be reasonable

The rules don’t prohibit all payments, such as salaries and wages, to an insider. You simply need to make sure that any payment is reasonable relative to the services or goods provided. In other words, the payment must be made with your nonprofit’s tax-exempt purpose in mind.

To ensure you can later prove that any transaction was reasonable and made for a valid exempt purpose, formally document all payments made to insiders. Also ensure that board members understand their duty of care. This refers to a board member’s responsibility to act in good faith; in your organization’s best interest; and with such care that proper inquiry, skill and diligence has been exercised in the performance of duties. One best practice is to ask all board members to review and sign a conflict-of-interest policy.

Appearance matters

Some states prohibit nonprofits from making loans to insiders (such as officers and directors) while others allow it. In general, you’re safer to avoid such transactions — regardless of your state’s law — because they often trigger IRS scrutiny. Contact us to discuss the best ways to avoid both excess benefit transactions and the appearance of them in your organization.

© 2024

 

Planning an event? Don’t neglect sponsorships - business consulting and accounting services in bel air md - weyrich, cronin and sorra

Planning an event? Don’t neglect sponsorships

There are many ways to evaluate the success of a not-for-profit event. But for most nonprofit leaders, financial success — how much did we raise? — is the metric that ultimately matters. To be financially fruitful, nonprofit events need sponsors (companies and individuals) to cover a portion of expenses. Be sure to make securing sponsorships central to planning your organization’s events.

Best practices

Depending on your organization, your special event might be a dinner gala, a conference, an auction, a golf tournament, a concert or a combination (or none) of these. But finding solid sponsorship largely follows the same process, regardless of the event’s format.

For example, you want time on your side. Nonprofits often compete with peer organizations for the same philanthropic dollars, so start early. It’s not overly ambitious to have a fundraising plan in place a year in advance. And it’s a good practice to lock in sponsors four to six months before your special event.

To develop a list of supporters most likely to step up as sponsors, hold a magnifying glass to your organization’s mission statement. Think in terms of appropriateness and quality. For example, an athletic clothing manufacturer could be an excellent sponsor for a youth soccer league tournament. A local grocer might be just the right target for a food bank’s silent auction.

Using teamwork

You’re more likely to be successful if you assemble a team with strong community connections. Ask your executives, board members and volunteers to reach out to members of their personal and professional networks to solicit sponsorship help. These ambassadors should be well prepared with information about the benefits each sponsor will receive.

This includes the event’s likely attendees. You’ll want to convince potential sponsors that your attendees belong to the same demographic they target for their products and services. Include data on where attendees live, along with their age, sex and buying power. Be factual in your approach — don’t exaggerate.

Exposure opportunities

Sponsors generally help finance nonprofit events in exchange for exposure to your audience. What does such exposure look like? You might offer to put the sponsor’s name on event materials — including signs, banners, brochures, tickets, newsletters and program books — and to recognize the sponsor verbally at the event. To help obtain the greatest amount of support from both large and small sponsors, develop multiple sponsorship options. In general, those companies paying the most should receive the most visibility at your event.

Also offer free attendance to at least one representative (and a guest) of any sponsoring company so the sponsor will get a chance to mingle with attendees, gather information and build connections. If you’re hosting an annual conference or meeting, you might want to provide the sponsor a speaking opportunity.

Long-term relationship

Don’t forget that sponsorships ideally mark the start of a long-term relationship between your nonprofit and the sponsor. After your event, for example, you may want to get your sponsor’s employees involved in your organization’s work by hosting a company volunteer day. And, of course, you should solicit the sponsor’s support again when you plan your next event.

Finally, be careful: In some circumstances, the IRS may consider corporate sponsorships paid advertising. In such cases, nonprofits can be liable for unrelated business income tax (UBIT). Contact us for information about finding sponsors while navigating complex UBIT rules.

© 2024

 

Update on a possible universal charitable deduction - business consulting and accounting services in harford county - Weyrich, Cronin and Sorra

Update on a possible universal charitable deduction

During the COVID-19 pandemic, Congress temporarily enabled individual charitable donors who didn’t itemize federal income tax deductions to deduct up to $300 in contributions in both 2020 and 2021. This universal charitable deduction galvanized many donors who might not otherwise have supported charities in those years. However, the deduction expired after 2021. A bipartisan group of U.S. senators, with support from many in the not-for-profit sector, are attempting to revive this tax break.

Donations drop, then rise

The approximate doubling of the standard deduction under the Tax Cuts and Jobs Act encouraged many donors who previously had itemized deductions and deducted charitable gifts to instead take the standard deduction. Researchers at Indiana University and the University of Notre Dame have found that this change resulted in a $20 billion drop in donations to charity in 2018, the year the higher standard deduction went into effect. Many nonprofits suffered from this pullback.

Although pandemic disruptions generally made giving data less reliable starting in 2020, the temporary universal charitable deduction appears to have motivated donors in middle and lower income brackets to give. According to the National Conference of State Legislatures, over 47 million U.S. households used the tax incentive in 2021 — and more than 21% of these donors had adjusted gross incomes under $30,000.

Potential congressional action

In early 2023, a bipartisan group of U.S. senators introduced the Charitable Act. (A similar bill was introduced in the U.S. House in May 2023.) This bill would expand and extend the nonitemized deduction for charitable giving by reviving and increasing the $300 deduction permitted in 2020 and 2021 ($600 for married couples filing jointly in 2021). Nonitemizing individual taxpayers would potentially be able to deduct about $4,500 (double that for joint filers) in donations annually.

Not surprisingly, many nonprofits and sector advocacy groups, including the National Council of Nonprofits and Charitable Giving Coalition, support the legislation. The most recent Giving USA survey (released by The Giving Institute) reported that charitable donations dropped by an inflation-adjusted 2.1% in 2023, which researchers believe is part of a longer-term trend toward donating less to charity.

Future of the bill

Although the Charitable Act was referred to the Senate Finance Committee, it hasn’t been taken up and its future in its current incarnation is in doubt. Organizations such as the Association of Fundraising Professionals are encouraging members to contact their legislators to revive the bill. And the nonprofit sector is likely to continue to lobby for legislation it believes will raise charitable giving levels.

© 2024