Biden Budget May Spur More Charitable Giving, Experts Say

June 02, 2021 9:18 AM | Philanthropy Delaware (Administrator)

(June 1, 2021 by Dan Parks, President Biden’s first budget proposal calls for a big boost in domestic spending to help low-income people while proposing certain tax increases that could boost incentives for charitable giving, experts say.

Nonprofits advocates — also noting the absence of an effort to limit the value of itemized deductions, including contributions to charity — generally gave the budget plan high marks.

Michael Nilsen, vice president of communications and public policy at the Association of Fundraising Professionals, noted in an emailed statement that Biden’s budget proposes increasing the capital-gains tax on the wealthy, plus changes to estate taxes that “could cause heirs to incur significant capital-gains taxes.”

Nilsen added: “These increases could create a strong incentive for some taxpayers to contribute property or shares of stock to charity, as we know that tax and financial incentives play a key role in giving decisions as the amount of money involved gets larger.”

In an analysis that will publish later Tuesday, the National Council of Nonprofits notes that the budget calls for a 16 percent increase in domestic spending. David Thompson, vice president for public policy at the council, said that such strong growth in domestic spending likely would mean extra revenue for nonprofits that contract with the government to provide services to poor and low-income people.

The council also praised the budget and associated documents for proposing to make “permanent several temporary tax provisions, including the expanded Earned Income Tax Credit, the Premium Tax Credit, the Child Tax Credit, and the Child and Dependent Care Credit.”

However, Thompson expressed disappointment that the budget does not call for an extension of a tax deduction available to people who don’t itemize their tax returns.

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