The Charitable Act, a bill that would permanently restore an above-the-line federal income tax deduction for charitable contributions made by non-itemizing taxpayers, was reintroduced in the current Congress with bipartisan cosponsorship. The bill’s text would set the deduction at one-third of the standard deduction for the relevant filing status — substantially higher than the $300 / $600 limits that had been in effect under the temporary CARES Act provisions of 2020 and 2021.
The bill has not advanced as of this writing, but the legislative interest is the most serious congressional engagement with the universal-deduction question since 2017. The reasons for the renewed attention are worth understanding because they are not, primarily, the reasons sector advocates have traditionally cited.
The donor-household decline became impossible to ignore
The most direct driver of renewed interest is the now well-documented decline in the share of US households that give anything at all to charity. The figure has fallen from roughly two-thirds in the year 2000 to under forty percent in the most recent Giving USA estimate. The decline accelerated after the 2017 tax law and has not reversed.
The aggregate dollar volume of US giving has continued to grow, supported by very large gifts from a small number of donors, but the breadth of the donor base has narrowed sharply. Civic-engagement scholars, sector researchers, and several elected officials have begun to frame the trend as a participation problem rather than a revenue problem. The question is not whether the sector is being adequately funded but whether the practice of charitable giving is being preserved as a broadly shared civic act.
The fiscal cost is contested
The Joint Committee on Taxation’s preliminary scoring of the bill produced a ten-year revenue cost in the range of $50 billion. Whether this is "expensive" depends on the comparison frame. As a share of total federal tax expenditures or compared with the various TCJA provisions extended in subsequent legislation, the cost is modest. As a stand-alone item in a tightening fiscal environment, it is non-trivial.
The bill’s sponsors have argued that the induced-giving response would partially offset the static cost, with new charitable contributions generating economic activity (and, downstream, tax revenue) at the recipient organizations. The sector’s economic-impact studies provide some support for this argument but not at a level that would close the static gap on its own terms.
Sector positions are not entirely aligned
Independent Sector, the National Council of Nonprofits, the United Way Worldwide, the Salvation Army, and most large religious denominations support the bill. The Council on Foundations and the National Association of Charitable Gift Planners have offered qualified support, with concerns about how the deduction interacts with private-foundation and donor-advised-fund rules.
A smaller cluster of sector commentators — mostly affiliated with effective-giving and meta-philanthropy organizations — have argued that the deduction would primarily subsidize giving that would have happened anyway and would do little to address the structural concentration of charitable capital among very large donors. Their preferred policy interventions involve donor-advised-fund payout requirements and excess-business-holdings rules for private foundations rather than broader deduction expansion.
Whether the bill advances to a floor vote is, as of early 2026, uncertain. The mechanics of the legislative calendar suggest that meaningful action would require bundling into a larger fiscal package, and the prospects of any such package taking shape during the year are themselves uncertain. The sector’s expectation, based on the history of similar proposals over the past eight years, is that the bill will progress further than its predecessors but may not reach final passage in the current Congress.