Talking Points for the 2025 Tax Negotiations
Overview
In 2025, many provisions of the Tax Cuts and Jobs Act of 2017 (TCJA) will expire, prompting the need for Congress to pass legislation before the end of next year that extends, amends, or expands the TCJA, or some combination thereof.
This guide supplements other Council resources. Council members can access the August recess packet (which includes template scheduling emails, draft agendas for your meetings, and other tools) and other lobbying and advocacy resources that will help you schedule and structure a Hill meeting, as well as conduct follow-up afterward. We update those materials regularly, and we will share updated versions for the 119th Congress.
We see this as an opportunity for philanthropy. Many of the policies that impact the operations of foundations and incentivize charitable giving are tax issues, meaning any tax package has the potential to affect the philanthropic infrastructure. Now is the time to meet with your congressional offices, particularly staffers who work on tax issues.
How to use this page
This webpage provides a detailed outline for a conversation with congressional staff about policy issues that impact philanthropy.
Use this as a guide. Take what you need: not every foundation will use every talking point included (and you wouldn’t have time in most meetings anyway). Choose the talking points that are most important to your work. Most importantly, weave stories about your foundation’s impact on the specific member’s state or district into these talking points.
After your meeting, reach out to Nidale (nidale.zouhir@cof.org) or Eddie (edward.shimkus@cof.org) to let us know how it went. We can conduct follow-up here in Washington, DC. Let us know what story you told: knowing those stories helps enrich our lobbying and advocacy work.
Talking point 1: Philanthropy is a partner in advancing the greater good.
Each year, foundations provide tens of billions of dollars in funding to charitable organizations and communities across the country and around the world. In turn, the U.S. nonprofit sector makes up more than 10% of the U.S. economy, employs 12.3 million people, and spends nearly $2 trillion annually.
Foundations have the convening power to work across broad cross-sections of society, from business to education to government to international organizations to everyday Americans. And foundations often step in to provide critical, sometimes life-saving aid in the aftermath of disasters natural and manmade.
Tell your story: Is there a grant your foundation has made recently that left you inspired? How is your foundation partnering with other foundations, donors, government, local organizations, and/or businesses to respond to community needs, develop innovative solutions to long-term problems, or create a more vibrant community?
Talking point 2: Congress must do more to encourage everyday Americans to give.
The TCJA’s increase in the standard deduction and changes to other deductions led to a $20 billion decrease in charitable giving by individuals. In the last two years, charitable giving by individuals has not kept up with inflation. According to data from Giving USA, charitable giving by individuals decreased by 2.4% in 2023. Congress must expand the incentives for everyday Americans to give.
We urge Congress to:
- Enact a universal charitable deduction:
- A universal charitable deduction (UCD) would incentivize all Americans to give to the charitable organizations that enrich their communities and reflect their values.
- UCD is championed by nonprofits across the country and has broad bipartisan support.
- A charitable deduction for nonitemizers passed as part of COVID relief legislation; subsequently, we saw an increase in small-dollar donations the exact size of the deduction at the end of each tax year it was active.
- 118th Congress legislation:The Charitable Act (S.566/H.R.3435) has been introduced in the Senate by Sen. Lankford (R-OK) and Sen. Coons (D-DE), and in the House of Representatives by Rep. Moore (R-UT), Rep. Davis (D-IL), Rep. Steel (R-CA), and Rep. Pappas (D-NH). The Charitable Act is supported by more than 1,000 organizations across the country and enjoys bipartisan support in the House and Senate.
- Expand the IRA charitable rollover:
- Since its creation in 2006, many seniors have used the Individual Retirement Account (IRA) rollover to make a charitable gift to organizations they support. This allows IRA owners to transfer up to $105,000 per year to a qualified charity without paying income taxes.
- Expanding the IRA charitable rollover to include transfers to donor-advised funds (DAFs) would empower seniors with an additional giving tool to help maximize their lifetime giving.
- Maintain the increased deduction limit for charitable contributions:
- The TCJA temporarily increased the adjusted gross income limit to qualifying nonprofits from 50% to 60%.
- Congress should maintain this incentive and expand it to include all charitable gifts to 501(c)(3) organizations and supporting organizations.
Tell your story: How would expanding incentives to give to charitable organizations empower you to better support your community?
Talking point 3: Rising post-secondary education costs and workforce shortages are major problems facing communities. Foundations can be part of the solution.
As workforce shortages and the student debt crisis plague communities across the country, foundations are ready to be part of the solution — but we need policy changes to maximize our impact. We urge Congress to:
- Update the tax code to treat post-graduation scholarships like traditional scholarships.
- Post-graduation scholarship grants allow foundations to pay off a portion of an individual’s student loans; in return, that individual lives and works in a given area, boosting the economy and development of communities that would otherwise struggle to attract workers.
- Currently, the tax code treats these scholarships like income, decreasing the earning power of individuals already impacted by student debt.
- Congress should update the tax code to treat post-graduation scholarships as a charitable activity and exclude them from the recipient’s income.
- 118th Congress legislation: The Workforce Development through Post Graduation Scholarships Act (S.1757/H.R.3582) has been introduced in the Senate by Sen. Peters (D-MI) and Sen. Capito (R-WV), and in the House by Rep. LaHood (R-IL), and Rep. Sewell (D-AL).
- End scholarship displacement.
- Scholarship displacement occurs when a student receives a scholarship from an individual or organization other than their school, and the school decreases their financial aid package as a result.
- This practice creates confusion for families who are already struggling as post-secondary education becomes increasingly unaffordable.
- At the same time, scholarship displacement conflicts with a donor’s intent to support a student.
- Congress should prohibit colleges and universities from engaging in this practice.
Tell your story: Are you poised to deliver post-graduation scholarships as soon as Congress updates the tax code? Would post-graduation scholarships attract workers to your community that could help address other issues, such as health care provider shortages? Has your community suffered as a result of scholarship displacement? How would addressing either of these issues support your local economy?
Talking point 4: Congress must maintain and strengthen flexible giving tools
Foundations champion a diversity of causes and organizations, and employ a variety of grantmaking strategies and tools, to further their charitable missions. It is essential that Congress maintain this flexibility and honor the independence of the philanthropic sector. We urge Congress to:
- Preserve the flexibility of donor-advised funds. This charitable giving tool allows donors to commit funds to charity that can grow over time while retaining advisory privileges.
- DAFs allow donors of all financial means to expand their giving capacity over time while developing a charitable legacy.
- DAFs are a resilient giving vehicle. When times are tough, it’s harder for nonprofits to raise new funds from individual donors—but money in DAFs has already been committed and is therefore insulated from financial uncertainty and tighter personal budgets.
- DAFs allow community foundations and other DAF sponsors to adapt to evolving community needs, especially as funds are typically given without restrictions so nonprofits can invest the resources where they can have the biggest impact.
- Safeguard philanthropic endowments: Endowments allow foundations to maintain a delicate balance between advancing the greater good today and staying ready for a crisis tomorrow.
- In times of crisis, endowments allow foundations to step up: charitable giving spiked in 2020 and 2021 as foundations responded to COVID-19 and other urgent needs.
- Foundations need to be able to make the decision that is best for their work and mission when it comes to spending down assets or maintaining endowments long-term in order to meet future community needs or address deep-rooted issues.
Tell your story: How have DAFs or philanthropic perpetuity allowed you to respond to urgent needs and/or invest in more vibrant communities?
Talking point 5: Philanthropy is a resource to communities—and can be one for you, too.
Foundations are on the ground, providing resources to charitable organizations and responding to community needs on a day-to-day basis. We have a deep understanding of not only our local geographies but also how to connect charitable dollars with the communities that need it. We are a resource; please reach out to us for additional perspective on how policies you propose could impact our community.
Tell your story: Have you partnered with a government agency or congressional office in the past? What was the result?
