Earlier this year my wife Patti and I created a 501(c)(6) organization called The Greater Give. Its mission is simple: to compel more giving. The first initiative launched by The Greater Give is the Everyday Philanthropist Act, a piece of legislation which, if signed into law, will both increase and democratize charitable giving by creating a revolutionary new workplace mechanism called a Flexible Giving Account (FGA).
The proposed legislation passed a key milestone on July 26 when it was introduced to the U.S. House of Representatives by Congressman Erik Paulsen (R-MN) and cosponsored by Mark Pocan (D-WI), Mike Gallagher (R-WI), Cheri Bustos (D-IL), Tim Walberg (R-MI), and Ami Bera (D-CA).
The Everyday Philanthropist Act (H.R. 6616) addresses a reality of giving that has existed for many decades, namely that the tax incentives for making charitable donations are skewed to wealthy Americans who itemize their returns. The large majority of working Americans don’t itemize and therefore receive no tax-related incentive for charitable giving.
I firmly believe that Americans of all incomes and backgrounds are interested in helping their country and their communities, and that we’re missing an enormous opportunity to tap their charitable impulses and boost overall giving.
And that’s why we went to Congress with the Everyday Philanthropist Act. It would permit eligible employees to establish a Flexible Giving Account through their employer, then allocate a portion of their paycheck pre-tax to one or more charities of their choice. Because this will reduce their taxable income, it will actually increase their take home pay. If this kind of account sounds familiar, it’s because it’s modeled after popular tax-favored savings accounts for employee healthcare and retirement. So, both employees and employers will have no trouble understanding how it works.
An FGA gives the tens of millions of non-itemizing Americans a tax incentive for giving in the form of a pre-tax payroll deduction. Since it would dramatically increase America’s charitable donations and allow charities to more effectively impact the communities they serve, there’s no question that it’s a win-win for employees and charities.
But what about businesses?
As a business owner, I was sensitive to asking businesses to take on yet another responsibility. But the FGA works for business, too—in fact we have already received expressions of support from the business community. It’s not hard to understand why. For one thing, the administrative architecture is already in place. And by reducing the amount of taxable payroll, businesses will save on payroll taxes. In addition, benefits like the FGA also help companies recruit and retain quality employees. According to a survey conducted by America’s Charities, nearly 70 percent of employees rate the importance of working for an employer whose culture supports giving as “imperative or very important.” The same report states that nearly nine out of ten companies say that “providing effective employee engagement programs helps them attract and retain employees.” An FGA would give employers of all sizes an employee fringe benefit that maps to their business interests.
The common-sense approach of this proposal and its practicality (it would require only a minor revision to the tax code) help explain why it has garnered early support from a significant number of House members on both sides of the aisle. (It also holds the distinction of being the first charitable giving legislation sponsored by a member of the powerful House Ways and Means committee.)
Now we need your support to help make the Everyday Philanthropist Act a reality. We need business leaders and individuals to mobilize and create a whole new class of the Everyday Philanthropist. I urge you to take the following steps. First, visit The Greater Give website (www.thegreatergive.org) and click on “Take Action.” It’s a quick, easy way to let members of Congress know you’d like them to support the bill. Next, spread the word to colleagues, groups and individuals who might be interested in supporting this legislation. Finally, post your support for the bill on Twitter, Facebook, and LinkedIn using our hashtag: #EverydayPhilanthropist.
This is only the beginning, both for the Everyday Philanthropist Act and for The Greater Give. In the days and months ahead, I’ll fill you in on the progress of the bill and about new initiatives from The Greater Give team.
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