22 May 2020

House HEROES Act Missing Big Bipartisan Priority

As uncertainty dominates the globe amid the COVID-19 crisis, federal lawmakers continue to float legislative proposals to provide relief and rebuild the economy. The most recent proposal you might have seen action on was the HEROES Act that passed the House last week. And while the bill is more of a wish list and messaging document than it is a viable piece of legislation, it provides a good look at Democratic priorities for the next round of relief.

The nonprofit sector saw a few provisions included in the bill to help keep the lights on, like the elimination of the 500 employee cap on the Paycheck Protection Program and the earmarking of 25 percent of remaining PPP funds for the nonprofit sector. However, one glaring omission from the wish list was the expansion of the temporary universal charitable deduction that was passed as part of the CARES Act in March. As you may recall, lawmakers created a $300 above-the-line deduction for cash gifts to charity made in 2020, and the charitable sector has been advocating for an expansion ever since, both in value and the window of availability.

The exclusion is notable for several reasons, the most obvious being that the sweeping, $3 trillion package appears to include everything but the kitchen sink. This is a massive package, yet no member in a position of influence was willing to make the charitable deduction their top priority, which means that as far as the sector has come, it still has a lot of work to do. Another, less obvious reason this is notable is the fact that it has large bipartisan support. Not only did the 55-member Congressional Black Caucus make the extension of the universal charitable deduction one of their priorities for further relief, but a bipartisan group of 144 House lawmakers also wrote to leadership last month encouraging the inclusion of an increased cap on the UCD and a change to allow taxpayers to claim gifts made between March 13 and July 16 of this year on their tax returns for 2019.

Nonprofit services are in high demand during times of crisis, so lawmakers should be doing whatever possible to encourage Americans to donate more to support those services. The HEROES Act will not become law in its current form, but House Democrats made it clear expanding the charitable giving incentive is not on their $3 trillion priority list. So now, we must turn to our champions in the Senate, who we hope will help advance an expanded deduction in future relief legislation to drive more donations to the nonprofits that need them most.