By: Michael Gordon, Communications Coordinator

National Health Council (NHC) Chief Executive Officer Randall Rutta submitted a statement for the record on behalf of the NHC this week to the United States Senate Committee on Finance prior to their hearing on “Examining Charitable Giving and Trends in the Nonprofit Sector.” The statement espouses several potential policy solutions to help strengthen a nonprofit sector that still finds itself struggling to recover from the harmful effects and fallout from the COVID-19 pandemic.

In his statement, Rutta pointed out that the nonprofit sector is the third largest employment sector in the country and must be protected as it remains an essential element of our country’s economic and social wellbeing.

According to Rutta, the importance of nonprofits has been elevated to a new level during the COVID-19 emergency, further highlighting the importance of organizations which have risen to meet challenges such as reduced giving, cancellation of fundraising events, the loss of volunteers and more while still working to provide those crucial services within their respective communities. The patient advocacy community has particularly stepped-up, providing services and information to people with chronic conditions and disabilities as well as advocating for the health and safety needs of their communities.

Rutta’s statement delved into issues surrounding the decrease in the number of taxpayers choosing to itemize their deductions, a trend which, according to Rutta, stems from the doubling of the standard deduction in 2018, and which in turn has disincentivized charitable giving and denuded a crucial revenue stream for nonprofits.

In his statement, Rutta urged Congress and the Administration to remedy this issue by renewing the universal charitable deduction for non-itemizers and significantly increase the cap on the deduction, as proposed in the bipartisan Universal Giving Pandemic Response and Recovery Act.

He also called on policymakers to extend two additional disaster-relief giving incentives that expired on December 31, 2021, those being the provision permitting individuals who itemize to deduct charitable donations up to 100% of their adjusted gross income as well as the measure allowing corporations to deduct charitable donations up to 25% of taxable income.

Rutta also highlighted the pandemic’s many impacts that have caused a dramatic decrease in the nonprofit sector workforce, citing 450,000 fewer employees as of December 2021.

According to Rutta, the ensuing labor shortage has had tangible consequences that can be seen in countless communities where nonprofits have been forced to restrict needed services, institute waiting lists, or close operations entirely.

To that end, Rutta calls on Congress to retroactively restore the Employee Retention Tax Credit, as proposed in the bipartisan ERTC Reinstatement Act.

The testimony also asks Congress to modify nonprofit eligibility for relief beyond the current “gross receipts” test and definition of eligible payroll expenses to include childcare and education subsidies to reflect the increased costs charitable organizations experienced as they struggle to maintain services throughout the ongoing health.

Additionally, Rutta’s testimony asks that any relief package also include core components of the Work Opportunities and Resources to Keep Nonprofit Organizations Well (WORK NOW) Act, which would infuse funds into the nonprofit community across the country, alleviating those issues with the sectors workforce and ensuring nonprofits are able to meet the needs of the populations they serve.

Read the full statement here.