- PURPOSE: Restores and expands the non-itemizer charitable deduction, which supports the nonprofit sector’s workforce and provides an irreplaceable source of unrestricted capital and general operating support
- SUPPORTED BY: Forefront, Charitable Giving Coalition, National Council of Nonprofits, United Philanthropy Forum
- IMPACT: Restoration of the universal charitable or non-itemizer deduction is a key policy priority for nonprofit member organizations nationwide. This bill incentivizes all taxpayers to give to charity, regardless of their income or whether they itemize. The bipartisan CARES Act and its extension in 2020 included a universal $300/$600 deduction for charitable contributions for single/married filers, which data show led to an increase in both donations and donors in 2020.
- FACT SHEET
2025 Tax Package: Opportunities for the the Nonprofit Sector
In 2025, Congress will enact major tax reform legislation, which provides an opportunity for nonprofit sector stakeholders to seek the inclusion of tax provisions that would be beneficial to the sector as a whole. In addition to the Charitable Act (see above), such proposals include:
- Tax Fairness for Nonprofit Employers: Nonprofits employ 11% of the workforce in Illinois. Yet, many tax credits and tax deductions made available to private sector employers through income tax filings are unavailable to nonprofit employers, because nonprofit employers do not pay income tax. (Examples include childcare, work opportunity, paid family and medical leave, Indian employment, pension start up, and disabled access tax credits.) Nonprofit employers do, however, pay payroll taxes. By creating similar benefits through payroll taxes, nonprofit employers would be treated more fairly. Read more details in the summary papers from National Council of Nonprofits and Independent Sector.
- Workforce Development Through Charitable Loan Repayment: Charitable loan repayment should receive the same tax treatment as traditional scholarships. “Post-graduation scholarship grants” are currently subject to income tax, whereas charitable scholarships are not. In both cases, funds are used to pay or repay the same type of expenses: tuition, books, and other fees related to higher education. In this proposal, post-graduation scholarships would be classified as a charitable activity and excluded from an individual’s federally taxable income. The concept is supported by the Council on Foundations and the Alliance of Illinois Community Foundations. Download a Fact Sheet (from 118th Congress; will be updated).
- Volunteer Mileage Rate: Each year, the IRS is permitted to make adjustments to the federal business mileage rate. In contrast, the IRS rate for volunteer mileage (i.e., for volunteers who drive their vehicles on behalf of charitable nonprofits to transport property or individuals) is fixed in statute at 14 cents/mile and has not been adjusted for over 25 years. Under this proposal, the charitable mileage rate would be equalized with the business rate. This proposal is supported by Independent Sector, National Association of Towns and Townships, National Council of Nonprofits, plus this initial list of organizations (this is expected to grow). See news release from the sponsor during the 118th Congress. Download a Fact Sheet (from 118th Congress; will be updated).
Federal Budget
Forefront advocates for federal investment in the social impact sector and the communities we serve through the Congressional budget process. This includes both spending and tax policy.
- Key Issues in 2025: Congress likely to propose significant spending reductions to fund the cost of extending the 2017 Tax Cuts, which are scheduled to expire 12/31/25. They will likely use budget reconciliation, which means the bills will be huge, move quickly, and only require simple majorities. Early leaked budget documents suggest that Congress intends to consider cuts to Medicaid, SNAP, TANF, and even Social Security or Medicare, in addition to sweeping changes across federal agencies. These changes will have a direct impact on the State of Illinois’ budget for two reasons. First, Illinois’ income tax collections are derived from federal adjusted gross income (AGI). So, if the federal government cuts taxes, which shrinks the AGI of many filers, the state will automatically be taxing fewer dollars, unless it proactively decouples from the federal changes. Second, if the federal government cuts programs that the State prioritizes, the state will need to find revenue to backfill those cuts, and/or make difficult decisions about eliminating key programs such as the state’s Medicaid expansion, which covers almost 800,000 people in Illinois at a price tag of ~$4 billion in total funds.
- Other Federal Info: See ARPA Databases managed by Results 4 America, the National Council of State Legislatures’ ARPA FRF Allocation Dashboard, Center on Budget Policy and Priorities’ Fiscal Recovery Fund (FRF) Spending by State, Chicago Community Trust’s Federal Recovery Funds Dashboard, Pandemic Response Accountability Committee, State and Local Fiscal Recovery Fund. The text of the Inflation Reduction Act can be found in S. Amendment 5194 to H.R. 5376 from the 117th Congress. The Inflation Reduction Act by the Numbers provides a snapshot into the impact of the legislation.
Voting Rights
Forefront joins its national partners in supporting legislation that expands and protects the right to vote and the protections for democratic elections in our country. We envision a society in which all people have representation, and we believe that a healthy social impact sector is fundamental to a healthy democracy. We support civic engagement, voting rights, open elections, accountable and ethical government, a full Census count, greater connectivity, and civil dialogue. To this end, we supported the John Lewis Voting Rights Advancement Act (HR 4 and HR 5746 in the 117th Congress), and will continue to support similar legislation if reintroduced in the future. We remain deeply concerned about attempts to curtail voting rights and will vigorously oppose any attempt to repeal the Voting Rights Act of 1965.
Forefront is committed to supporting full participation in the decennial Census; 2030 Census planning is underway. We continue meeting regularly with US Census Bureau staff and key partners from our statewide effort in 2020.
