[Senate Hearing 116-281]
[From the U.S. Government Publishing Office]




                                                        S. Hrg. 116-281
 
        SUPPORTING CHARITABLE GIVING DURING THE COVID-19 CRISIS

=======================================================================

                            VIRTUAL HEARING

                               before the

                        JOINT ECONOMIC COMMITTEE
                     CONGRESS OF THE UNITED STATES

                     ONE HUNDRED SIXTEENTH CONGRESS

                             SECOND SESSION

                               __________

                              JUNE 9, 2020

                               __________

          Printed for the use of the Joint Economic Committee
          
          
          
          
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             U.S. GOVERNMENT PUBLISHING OFFICE 
 40-895                WASHINGTON : 2020        
        
        
        
        
        
                        JOINT ECONOMIC COMMITTEE

    [Created pursuant to Sec. 5(a) of Public Law 304, 79th Congress]

SENATE                               HOUSE OF REPRESENTATIVES
Mike Lee, Utah, Chairman             Donald Beyer, Jr., Virginia, Vice 
Tom Cotton, Arkansas                     Chairman
Rob Portman, Ohio                    Carolyn Maloney, New York
Bill Cassidy, M.D., Louisiana        Denny Heck, Washington
Ted Cruz, Texas                      David Trone, Maryland
Kelly Loeffler, Georgia              Joyce Beatty, Ohio
Martin Heinrich, New Mexico          Lois Frankel, Florida
Amy Klobuchar, Minnesota             David Schweikert, Arizona
Gary C. Peters, Michigan             Darin LaHood, Illinois
Margaret Wood Hassan, New Hampshire  Kenny Marchant, Texas
                                     Jaime Herrera Beutler, Washington

                Scott Winship, Ph.D., Executive Director
                 Harry Gural, Democratic Staff Director
                 
                            C O N T E N T S

                              ----------                              

                     Opening Statements of Members

Hon. Mike Lee, Chairman, a U.S. Senator from Utah................     1
Hon. Donald Beyer Jr., Vice Chair, a U.S. Representative from 
  Virginia.......................................................     3
Hon. Amy Klobuchar, a U.S. Senator from Minnesota................     5

                               Witnesses
                                Panel I

Hon. James Lankford, a U.S. Senator from Oklahoma................     7
Hon. Jeanne Shaheen, a U.S. Senator from New Hampshire...........     9

                                Panel II

Mr. Bill Crim, President and CEO, United Way of Salt Lake, Salt 
  Lake City, UT..................................................    10
Dr. Una Osili, Associate Dean for Research and International 
  Programs at the Indiana University Lilly Family School of 
  Philanthropy, Indianapolis, IN.................................    12

                       Submissions for the Record

Prepared statement of Hon. Mike Lee, Chairman, a U.S. Senator 
  from Utah......................................................    32
Prepared statement of Hon. Donald Beyer Jr., Vice Chair, a U.S. 
  Representative from Virginia...................................    33
Prepared statement of Hon. James Lankford, a U.S. Senator from 
  Oklahoma.......................................................    35
Prepared statement of Hon. Jeanne Shaheen, a U.S. Senator from 
  New Hampshire..................................................    36
Prepared statement of Bill Crim, President and CEO, United Way of 
  Salt Lake, Salt Lake City, UT..................................    36
Prepared statement of Dr. Una Osili, Associate Dean for Research 
  and International Programs at the Indiana University Lilly 
  Family School of Philanthropy, Indianapolis, IN................    38
Response from Mr. Crim to Question for the Record Submitted by 
  Senator Klobuchar..............................................    42
Response from Mr. Crim to Question for the Record Submitted by 
  Senator Hassan.................................................    44
Response from Dr. Osili to Question for the Record Submitted by 
  Senator Klobuchar..............................................    45
Response from Dr. Osili to Question for the Record Submitted by 
  Representative Schweikert......................................    45


        SUPPORTING CHARITABLE GIVING DURING THE COVID-19 CRISIS

                              ----------                              


                         TUESDAY, JUNE 9, 2020

                    United States Congress,
                          Joint Economic Committee,
                                                    Washington, DC.
    The WebEx virtual hearing commenced, pursuant to notice, at 
2:30 p.m., in Room 301, Russell Senate Office Building, Hon. 
Mike Lee, Chairman, presiding.
    Representatives present: Beyer, Herrera Beutler, 
Schweikert, Trone, and LaHood.
    Senators present: Lee, Klobuchar, and Hassan.
    Staff present: Andres Arguello, Robert Bellafiore, Vanessa 
Brown Calder, Barry Dexter, Harry Gural, Colleen Healy, 
Christina King, Jim Whitney, and Scott Winship.

 OPENING STATEMENT OF HON. MIKE LEE, CHAIRMAN, A U.S. SENATOR 
                           FROM UTAH

    Chairman Lee. Thank you for joining us today for today's 
hearing of the Joint Economic Committee. Over the past few 
months, following the spread of the novel coronavirus, and all 
the devastation that has been brought about in its wake, 
millions of Americans have been robbed of health, of financial 
security, certainty of normalcy in their day-to-day lives, and 
even of their sense of community and connection to others.
    As it always has in response to our Nation's challenges, 
our voluntary civil society in America, through its courage and 
compassion, has striven to bring us together to address this 
very significant, in many ways unprecedented, public health 
crisis.
    Nonprofits, churches, and other voluntary institutions of 
civil society have for centuries played a uniquely important 
role in American life, helping to provide for others' basic 
needs, and ensuring the stability of community institutions, 
and supplying goods such as education and the arts.
    Key to the spirit is charitable giving. Without financial 
donations, these organizations simply cannot undertake the good 
works that they do in providing the indirect benefits, 
including the provision of these indirect benefits, personal 
connectedness, reciprocity, and trust, that are invaluable, and 
that have become indispensable to community thriving, and the 
thriving of the human condition.
    Unfortunately, there have been worrisome trends in 
charitable giving over recent years, and over the last few 
decades. As the Joint Economic Committee staff research has 
found, while total American charitable giving has increased in 
most years over the last half century, the overall percentage 
of Americans giving has actually decreased from 66 percent in 
2000 to 56 percent in 2014, with a particularly pronounced drop 
among lower income Americans, among those at the lower end of 
the economic--of the income spectrum. The drop in giving since 
then has dropped the most.
    Additionally, the share of individual giving out of total 
giving has dropped over time, decreasing from 83 percent in 
1978 to 68 percent in 2018. In other words, giving now comes 
increasingly from fewer, wealthier people and organizations. So 
why does that matter? Why should we worry about it? Why are we 
here today to discuss that?
    Well first, it denies communities the necessary positive 
spillover effects that flow from individual contributions and 
widespread altruism.
    And second, the very causes being supported are likely to 
change as a result of these trends. While higher-income 
Americans tend to give to education and the arts, less affluent 
Americans tend to give towards service and assistance to the 
poor.
    In fact, those making $100,000 or less per year are 
responsible for almost 49 percent of all giving in this area of 
vital need. In other words, even though this segment of the 
American population might not be donating in larger increments, 
there are a lot of them donating. And a lot of them who have 
donated historically. And those people are donating in 
especially valuable areas, and the areas where the absence of 
the giving might be felt especially strongly with especially 
devastating consequences.
    One contributor to this trend is the Federal Tax Code's 
inequitable treatment of charitable giving. Because it is a 
below-the-line deduction, only those who itemize--that is, to 
say generally tax filers toward the upper end of the income 
scale--can currently claim the charitable deduction.
    Lower income families who don't itemize now receive no 
incremental additional tax benefit specifically because of 
their charitable contributions. That is to say, they do not get 
anything beyond the standard deduction.
    This is an unintended consequence of the long-standing 
bipartisan effort to raise the standard deduction, which itself 
provides tax relief to lower- and middle-income filers. And 
that is a good thing. But it is an inequality just the same. 
And it is an injustice for working families and to the local 
charities who rely on them, especially those charities who do 
some of the most important work, as we have just mentioned.
    While the CARES Act passed earlier this year did add an 
above-the-line deduction of $300 for non-itemizers, much more 
could and I believe should be done.
    I called this hearing to talk about how, especially in this 
time of immense, unusual hardship, when charitable giving is so 
essential, Congress could better address this disparity. In 
recent weeks, I have been part of a bipartisan working group 
that has developed legislation reforming this inequality. I am 
grateful that three other Members of the group, including 
Senator Lankford, and Senator Shaheen, and Senator Klobuchar, 
are willing to be here to talk about it today.
    Senator Klobuchar is a Member of the Joint Economic 
Committee, and Senators Shaheen and Lankford who are joining us 
specifically for this hearing today.
    Especially as we reopen our businesses and our 
institutions, leveraging charitable giving should be a top 
priority for those of us tasked with reviewing economic 
conditions in our country. In the coming months, those of us in 
the House and the Senate are going to expend a lot of energy 
trying to figure out which of the Federal programs on which we 
have spent all these trillions of dollars have worked, and 
which have not worked as well.
    It is going to be a complicated and at times probably 
controversial project for all of us. It is necessary, 
nonetheless.
    With the nonprofit sector, however, the vetting work has 
already been done for us. Charitable organizations only exist, 
and only attract donations, to the extent that they are already 
believed to succeed. In fact, you cannot get donations. And if 
you get donations once, you cannot get them again and again 
unless you can present evidence to your donors that you are 
actually doing something good with it.
    So these organizations can serve as sort of the tip of the 
spear in our national COVID response. Today's hearing will 
focus on just that. We are going to hear not only from Senators 
Lankford and Shaheen, and from Senator Klobuchar, who again is 
a Member of the Committee, but from two additional witnesses 
with valuable perspectives on philanthropy.
    I look forward to hearing the contributions of our 
panelists and our colleagues on this important topic. But 
before we proceed, I want to say just a couple of words about 
the hearing and about how our hearing has been modified from 
its usual format in light of the spread of the coronavirus.
    The hearing room has been configured to maintain the 
recommended six-foot social distancing between Members and 
other individuals in the room as necessary to operate the 
hearing, which we have tried to keep to a minimum.
    A number of Members and witnesses have chosen to use secure 
video teleconference technology, which will allow them to 
participate remotely. For those joining us remotely, once you 
start speaking there will be a slight delay before you are 
displayed on the screen. And so to minimize background noise, 
we are asking those of us who are using video conference--the 
video conference option to please click the mute button until 
it is their turn to speak or to ask questions.
    With that, we are now going to hear an opening statement 
from Vice Chairman Beyer. Vice Chair Beyer, go ahead.
    [Pause.]
    Vice Chair Beyer, go ahead and unmute yourself. We cannot 
hear you.
    [The prepared statement of Chairman Lee appears in the 
Submissions for the Record on page 32.]

OPENING STATEMENT OF HON. DONALD BEYER JR., VICE CHAIR, A U.S. 
                  REPRESENTATIVE FROM VIRGINIA

    Vice Chairman Beyer. Thank you, Senator Lee, very much. 
Senator Lee, thank you so much for putting this together. Thank 
you to our witnesses, Dr. Osili and Mr. Crim, for sharing your 
expertise and perspective. And thank you to Senators Lankford 
and Shaheen for joining the Committee this afternoon.
    Charities are one of our most unique and precious 
resources. They provide invaluable services and strengthen our 
communities. Perhaps at no time in our history has this 
important role been so visible as during this global pandemic 
and the resulting economic crisis.
    I volunteered at a local food bank recently, and as long as 
I was there we never saw the end of the line. And they told us 
that because half of their resources typically came from 
restaurants, the restaurants were all closed, that they were in 
really dire need.
    Throughout this crisis, American charities have been 
frontline responders. They provide communities with critically 
needed housing. They provide emergency child care for first 
responders, support for victims of domestic abuse, counseling, 
and other critical services.
    But as Chairman Lee said, unfortunately at a time when we 
need nonprofits more than ever, they are facing a really 
serious economic crisis. Three quarters of charities have seen 
a decline in donations since the crisis began. Half expect to 
absorb a hit of at least 20 percent.
    They receive donations from a lot of different sources--
businesses, foundations, individuals--but individuals are key. 
Seventy percent of all nonprofit gifts come from individuals.
    Since 2000, the share of households donating to nonprofits 
has fallen from two-thirds to 53 percent in 2016. To make that 
concrete, that's 20 million fewer households actually giving.
    And unfortunately the 2017 Republican tax cuts, the Tax 
Cuts and Jobs Act, made things worse. It doubled the standard 
deduction, so many people who used to be able to itemize could 
not anymore. And it capped the state and local tax deductions, 
raising the tax burden for so many people who used to give 
money.
    As a result, of course we saw that itemized deductions fell 
precipitously. Before 26 percent of households itemized; after 
the Tax Cut and Jobs Act, only 10 percent.
    So for the nonprofit world, that hurt really badly. Fewer 
itemizers means fewer givers. And it should not be a surprise 
to anybody that individual donations fell in 2018. Despite the 
fact that the economy was very strong, the unemployment rate 
continued to come down, the stock market continued to go up, 
charitable giving fell by 3 percent, inflation adjusted, and as 
a percentage of GDP it actually fell by 6 percent.
    And now with the current crisis, contributions are falling 
even faster, as they have fewer donations and most charities 
depend on one or two big events every year, and they have all 
been canceled.
    So this means less money will be available, when many more 
nonprofit services are actually needed. As a result, 60 percent 
of charities have cut services, and 13 percent of the small 
ones have actually ceased operations. And this has an impact on 
our employment, too, because literally 12 million Americans 
work for nonprofits, 10 percent of the private sector 
workforce.
    So one in six nonprofits had to furlough workers. One in 
eight had to lay off workers. So what do we do about it? We 
will talk to Dr. Osili and Mr. Crim today, but I am really 
excited about proposals to incentivize additional charitable 
deductions, to expand that $300 addition that was included in 
the CARES Act. This could really help offset the lost 
contributions from the Tax Cuts and Jobs Act.
    So we have done a lot in the meantime. Congress expanded 
the PPP, the Paycheck Protection Program, which includes 
nonprofits. And we have an employment retention tax credit in 
the CARES Act. And the HEROES Act increases that from 50 
percent to 80 percent.
    But there are other ways to go forward. One path is to tap 
the generosity of our senior citizens. I've introduced a bill 
that would incent the charitable giving by extending the IRA 
Charitable Rollover to allow people, starting at age 65, to 
make tax-free IRA rollovers to charities, while providing a 
guaranteed income for the senior citizen.
    I know Senator Klobuchar has introduced legislation to 
provide grants to nonprofits to help them retain employees, or 
hire those who have become unemployed.
    There are a lot of smart ways to address these challenges. 
Some in Congress feel no sense of urgency, but I know that all 
of us are hearing in our district everyday from nonprofits, big 
and small, that a sense of urgency is exactly what is needed.
    So I am grateful to Chairman Lee. This will be my first 
hearing with Chairman Lee, focusing attention on what we can do 
right now to support charities and help them weather the storm.
    Again, I would like to thank our witnesses for coming, 
inside and outside Congress, to help us move forward. With 
that, Chairman Lee, I yield back.
    [The prepared statement of Vice Chair Beyer appears in the 
Submissions for the Record on page 33.]
    Chairman Lee. Thank you so much, Vice Chairman Beyer, and 
welcome aboard and congratulations on your selection as the 
Vice Chair.
    We are now going to hear a brief opening statement from 
Senator Klobuchar before we proceed to our Member panel. 
Senator Klobuchar, go ahead.

 OPENING STATEMENT OF HON. AMY KLOBUCHAR, A U.S. SENATOR FROM 
                           MINNESOTA

    Senator Klobuchar. Well thank you so much, Chairman Lee, 
and thank you to Vice Chair Beyer. Actually, Vice Chair, you 
should know that Chairman Lee and I have co-chaired the 
Antitrust Subcommittee in different roles, ranking and chair, 
for, I do not know, like eight years together, and he is pretty 
good to work with. So you should be in good hands.
    I think what we see here is that the pandemic is squeezing 
our nonprofits on both ends. The public need is soaring for 
their help at a time when charitable giving and other revenue 
streams have declined drastically as a result of the pandemic, 
as my colleagues have noted.
    And I was really struck by that when I went and visited one 
of our food banks, and someone who was in the line said that 
they had previously volunteered. They were at a job and they 
volunteered, and now they were in line to get food.
    So things are changing, and a lot of people are out of work 
that had never even imagined they would be out of work. And a 
lot of people are having trouble financially. And we all know 
that one way to boost this up with help is our nonprofits. The 
Vice Chair mentioned my WORK NOW bill, which would actually 
connect some of the same concepts coming out of the Great 
Depression when Franklin Roosevelt started the CCC and 
basically took people who were unemployed and said here is 
something really good work to do. Well, we can do that through 
things like AmeriCorps, which I support. We can also do that by 
plugging people into our existing nonprofits. So that is one 
idea.
    The second is what the Chairman has been referring to, and 
that is the work that we are doing, and I am sure work is going 
on in the House as well, but in the Senate with Senator Lee and 
Coons and Lankford and Shaheen. Thank you for joining our 
Committee. As well as Senator Scott in advocating for a 
substantial above-the-line charitable deduction to help 
nonprofits who are sorely in need of revenue.
    I am glad that we were able to get a modest above-the-line 
deduction into the CARES Act, and we need to build on this 
success to greatly expand the deduction. Examples are Catholic 
Charities in Minneapolis and St. Paul, are facing increased 
costs totaling $1 million per month because of front-line 
staff, additional cleaning, redesigning their services so they 
can accommodate the horrible virus.
    Jewish Federation is seeing very similar numbers. Humanity 
forced many of the organizations to Minnesota to take deep 
cuts, including significant layoffs.
    These nonprofits are on the front line. I think the 
smartest thing we can do right now is to keep them strong. And 
thank you for holding this hearing, Chairman Lee.
    Chairman Lee. Thanks so much, Senator Klobuchar.
    I would now like to introduce our two distinguished 
colleague witnesses. First we are going to hear from Senator 
James Lankford who serves as a Senator from Oklahoma. Senator 
Lankford is a member of the Senate Committee on Finance, the 
Senator Committee on Appropriations, and the Senate Committee 
on Indian Affairs. And he is the Chairman of the Senate 
Homeland Security and Governmental Affairs Subcommittee on 
Regulatory Affairs and Federal Management. I am sure that flows 
easily when you say it.
    He has been involved in previous efforts to reform the 
charitable deduction. In fact, this has been a passion of 
Senator Lankford's for a very long time, including the 
introduction of the Universal Charitable Giving Act in 2019.
    Welcome, Senator Lankford.
    And after Senator Lankford, we are going to hear from 
Senator Jeanne Shaheen, who serves as a Senator from New 
Hampshire. Senator Shaheen is a member of the Senate Committee 
on Foreign Relations, the Senate Committee on Armed Services, 
the Senate Committee on Small Business and Entrepreneurship, 
and she is the Ranking Member on the Senate Appropriations 
Subcommittee on Commerce, Justice, Science, and Related 
Agencies.
    She has introduced her own legislation to promote 
charitable giving, and is a long-time advocate of this issue. 
Her legislation is the Supporting Charitable Institutions Act.
    Welcome to Senator Shaheen.
    So thanks for joining us today. Senator Lankford, you are 
now recognized for your testimony.

 STATEMENT OF HON. JAMES LANKFORD, A U.S. SENATOR FROM OKLAHOMA

    Senator Lankford. Chairman Lee, thank you, and Vice 
Chairman Beyer and other Members of the Committee. I appreciate 
you having the hearing today, and to be able to talk about this 
issue.
    I am going to stray from my prepared remarks. I have 
submitted some remarks for the record, though let me just make 
a couple of comments on this.
    I have served with nonprofits more than 20 years before I 
came to Congress. I understand the nonprofit issues and what 
they face both on finance, and the structure, and the staffing, 
and the challenges of volunteers, and all the things that 
happen when you work as a nonprofit.
    One of the issues that we face now, though, that has 
changed even from five, ten years ago, is the rise of the 
GoFundMe Page where individuals that want to give small-dollar 
donations will give dollars to individuals and to causes, 
things they see on the news, or things they hear about, and 
they will do a GoFundMe donation. That is a wonderful thing to 
do if they can find legitimacy at the GoFundMe page and what 
they are trying to be able to accomplish.
    Nonprofits are different, though, than the GoFundMe. 
Nonprofits do not exist just for a single event, a single 
person rise and fall, and then they go away. They exist for all 
people in the community. They are churches. They are 
synagogues. They are mosques. They are feeding the homeless. 
They are taking care of individuals' groceries. They are paying 
utility bills. They are the Boys and Girls Clubs helping with 
afternoon activities. They are Goodwill, providing jobs and 
opportunity and resources to people that need help.
    They are doing work all the time, every single day. And 
individuals that work in those nonprofits, they understand full 
well, but I fear some Americans do not; that we have three 
safety nets in America:
    The family is the first safety net. Nonprofits are a second 
safety net. And government is our third. And we often look to 
government to be able to solve the most difficult challenges of 
our safety net, and of people in crisis.
    But government is the last spot for that. The first two are 
essential. And if the family collapses, nonprofits struggle to 
keep up, and government struggles to keep up with that. If the 
family collapses, and nonprofits collapse, it all falls on 
government. And we are not structured to be able to help 
maintain the needs in communities like families are, and like 
nonprofits are.
    Government is efficient at writing a check. Government is 
efficient at developing a program to be able to facilitate 
activities. Government cannot meet the human needs that are 
there like a family can, and like a local nonprofit can.
    So I think it is beneficial for us in our official policy 
and what we choose to do in the Tax Code to be able to create a 
tax code that is encouraging to families, and is encouraging to 
nonprofits.
    Now again, Americans have their own money they can choose 
to do with what they want, and Americans are exceptionally 
generous people. But when we incentivize it, and we encourage 
it as we have with the CARES Act, we step up to say nonprofits 
are going to struggle through this time so let us do a $300 
above-the-line straight-off-the-top deduction for every 
American that they can choose to use, we are incentivizing that 
activity.
    Now I can be frank with this Committee to know, and the 
folks that are here know that I pushed for much more than just 
a $300 deduction above the line during the CARES Act. Many of 
us, if not all of us, did during that time period.
    But I think that there is more that we can do and should do 
in the days ahead. We have recommended a one-third of the 
standard deduction that is $4,000 for the individual, $8,000 
for the married filer, for them to be able to write off. That 
is a significant encouragement.
    That encourages individuals to be able to do more in their 
local communities to be able to make sure that we sustain that 
work, that essential safety net of not-for-profits all across 
our communities.
    So whether they are working in the arts, whether they are 
working in the homeless community, whether they are working in 
the faith community, they will still be there when this is said 
and done and this pandemic is over. Quite frankly, it is good 
policy no matter when we do it, whether it is pandemic or not 
for us to be able to continue to tax less to encourage more 
engagement.
    By far, not-for-profits are more efficient in getting 
resources and assistance to local communities than government 
is. So the stronger we can have not-for-profits, we are getting 
more efficient support to local communities. And I think that 
is the right thing for us to continue to incentivize.
    I do want to say thank you to Senator Shaheen, Senator 
Coons, Senator Tim Scott, Senator Klobuchar, and certainly 
Chairman Lee. We have all been very engaged in this 
conversation, and it is good to have this as not a partisan 
conversation. It is just a ``what can we do to be able to help 
as many people as possible?'' conversation.
    Congressman Walker in the House has been a tremendous 
advocate for this for a very long time, as well. He also knows 
full well what it means to be able to work around not-for-
profit institutions and understands the needs and the 
operation.
    So I am grateful to be able to have great partners in this 
and look forward to actually getting this done in the days 
ahead.
    [The prepared statement of Senator Lankford appears in the 
Submissions for the Record on page 35.]
    Chairman Lee. Thanks so much, Senator Lankford.
    Senator Shaheen.

   STATEMENT OF HON. JEANNE SHAHEEN, A U.S. SENATOR FROM NEW 
                           HAMPSHIRE

    Senator Shaheen. Well thank you very much, Mr. Chairman. I 
am really pleased to be able to join Senator Lankford in 
talking about this critical effort, and really appreciate your 
leadership and Vice Chairman Beyer and all of the Members of 
this Committee in holding this hearing today. And I appreciate 
your leadership of this bipartisan group to try and address the 
charitable contribution, and hopefully in another package of 
help that we are trying to provide to the people of this 
country.
    You know, my home State of New Hampshire has historically 
very small government, and a very robust nonprofit sector. And 
as Senator Lankford said so eloquently, the nonprofit sector 
provides so many services in New Hampshire and a real safety 
net for many of the people in our state.
    We have organizations like area agencies that provide 
programs for people with developmental disabilities and their 
families. We have the New Hampshire Coalition Against Domestic 
and Sexual Violence that provides crisis centers for people who 
are victims of domestic violence.
    And we have the New Hampshire Food Bank. You know, those 
are just three examples of the organizations that right now are 
working overtime to address the challenges as a result of this 
pandemic.
    Now what is interesting to me is that the New Hampshire 
Food Bank, unlike the other two agencies that I mentioned, 
accepts no public dollars. Many of our nonprofits get some 
public dollars at the county, at the state, at the city level, 
but many of them do not. And right now they are working 
overtime because of this pandemic. The call for their services 
has increased, and yet the contributions, their ability to 
continue to provide those services, is very much at risk.
    According to a recent poll survey that was conducted by the 
New Hampshire Center for Nonprofits, 92 percent of responding 
nonprofits have reported a drop in revenue by an average of 34 
percent. And 45 percent of the respondents have had to furlough 
some of their employees.
    And at the same time, according to this same survey, 38 
percent of organizations, including 45 percent of human service 
organizations, reported an increase in demand for their 
services. So this is a time where whatever we can do to try and 
encourage private giving, which as you pointed out in your 
statement has historically been higher than it is right now, 
the more we can do to support that private giving to encourage 
help for these organizations, the more we can help them survive 
the current economic situation that we are in, and the better 
they can continue to provide services whether it is in the 
arts, or homelessness, or whatever it is.
    And as Senator Lankford pointed out, what we are hoping to 
do is get an above-the-line deduction of up to one-third of the 
standard deduction, so $4,000 for individual or $8,000 for a 
married couple filing jointly. And in addition to that, I have 
proposed as part of what we are doing allowing the deduction 
for charitable contributions made before the new tax filing 
deadline of July 15th to be carried back to Tax Year 2019. So 
we hope it would help stimulate giving for this year right now 
when it is so desperately needed.
    So thank you again, Mr. Chairman, for holding this hearing, 
for your leadership in this effort. I am so pleased to be able 
to join you and Senators Lankford and Scott, Senators Klobuchar 
and Coons, and hope that we can be successful in getting 
something into the bill in the Senate that we can then get 
signed into law. Thank you.
    [The prepared statement of Senator Shaheen appears in the 
Submissions for the Record on page 36.]
    Chairman Lee. Thank you so much. Your remarks, both of you, 
have been terrific and have provided deep insight, backed up by 
many years of toil in this area. So thanks so much for joining 
us today. We are very grateful.
    We are now going to transition over to our second panel. 
Our second panel will be joining us remotely. I am going to 
introduce each of our witnesses.
    First we have Mr. Bill Crim, who is the President and CEO 
of United Way of Salt Lake. He serves on United Way's Worldwide 
National Professional Council, and the Governor's Education 
Excellence Commission in Utah.
    Previously Mr. Crim served on the Utah State Work Force 
Investment Board, and he has been a research fellow for the 
Coalition on Human Needs here in Washington, D.C. Welcome, Mr. 
Crim.
    Next we will have Dr. Una Osili, who is Professor of 
Economics and Associate Dean for Research and International 
Programs at the Indiana University Lilly Family School of 
Philanthropy at IUPUI.
    Dr. Osili oversees the research and publication of Giving 
USA, an annual report on American philanthropy, as well as the 
Index of Global Philanthropy and Remittances, and Index of 
Philanthropic Freedom. Thank you for being here, Dr. Osili.
    We appreciate you both joining us today. Mr. Crim, you are 
now recognized for your testimony.

 STATEMENT OF MR. BILL CRIM, PRESIDENT AND CEO, UNITED WAY OF 
                 SALE LAKE, SALT LAKE CITY, UT

    Mr. Crim. Thank you, Chairman Lee, Vice Chairman Beyer, 
Members of the Committee.
    I deeply appreciate the opportunity to come before you to 
talk about the work of the charitable sector in our country, 
our response to the COVID-19 crisis, and the role that tax 
policy plays in driving private giving.
    United Way of Salt Lake builds cross-sector partnerships 
that work to solve our communities' most complex social and 
economic problems. Within these partnerships, we hold ourselves 
accountable to results that no single organization or sector 
can achieve alone.
    Our commitment to creating lasting change and helping all 
kids and families succeed regardless of their circumstances, 
holds especially true during this time. So we continue to 
address the health and economic impacts of the pandemic. And as 
we are all called to address the urgent need for racial justice 
in our country, we know that the role of nonprofits, of faith 
organizations, and of charitable giving is critical.
    Over the past three months, hundreds of individual Utahns 
have generously risen to the challenge of supporting our 
community. In addition, key business partners like Goldman 
Sachs, Mark Miller, Zions Bank, Savage, and many others have 
contributed to this work.
    This generosity has allowed us to respond to dramatic 
increases in contacts through 2-1-1, which provides information 
or referral to those in need, provides critical support to 
dozens of our community partners meeting essential basic needs, 
and to develop a comprehensive initiative to address the 
dramatic earning loss experienced by so many students over the 
past three months.
    We know that the reasons for giving are highly personal, 
but I can assure you from first-hand experience that people 
give to charities for altruistic reasons. Sometimes this 
selfless concern for others is driven by faith, or simply a 
desire to give back to the community. Often, and in our case, 
it is because people believe that by working together we can 
solve our community's most complex problems.
    But tax policy does influence people's behavior, from 
business decisions, to buying a home. This does not mean that 
every person is influenced by tax policy, but large numbers of 
people are.
    Charitable giving is the most discretionary financial 
decision someone can make. Good tax policy might be the nudge 
that someone needs to make their first donation. Or it might 
prompt a long-time donor to give a little more.
    Consider, for example, the person who gives $500 per year 
to charity. If they pay taxes at a 20 percent rate, that means 
they are paying $100 in taxes on that money that they are 
giving away. Setting aside the fundamental unfairness of taxing 
income that is being donated to help others, those taxes may 
prompt a smaller donation from some people who are not in a 
position to giving more.
    Conversely, if Congress would have relieved tens of 
millions of Americans from taxes on income they donate, it is 
not hard to imagine the positive impact on charitable giving. I 
am definitely not an economist or a tax policy expert, but I 
know that studies have consistently found that good tax policy 
will drive more giving. That includes increased giving by 
people who make small donations.
    United Way's basic needs charities, faith-based charities, 
and disaster relief charities rely heavily on small donations 
from large numbers of people. In our case, we raise about $15 
million per year in Salt Lake, but our average individual 
donation is $229 per year. Those small donations add up. 
Nationally, United Ways raise over $1 billion per year from 
small donors who give an average of $155 per year.
    Of course in my view the ideal Federal tax policy would be 
to permanently relieve all taxpayers from paying taxes on 
income they donate to charity. That could happen through an 
above-the-line exclusion or a non-itemizer charitable deduction 
combined with the existing deduction.
    But we understand that that may not be viable at this 
moment. But a temporary non-itemizer deduction could be 
instrumental in helping charities help our communities and 
those impacted by the crises facing our country.
    We understand Chairman Lee, Senator Klobuchar, and others 
are supporting a temporary deduction modeled after Senator 
Lankford's and Congressman Walker's legislation. We think that 
legislation would provide a much-needed infusion of donations 
directly to the charities that are leading the COVID-19 
response and recovery efforts.
    The recovery efforts by charities will go well beyond 2020. 
So the longer this legislation is in effect, the better it will 
help us support our communities and those who have been 
affected by COVID-19.
    As I close, I want to note that several Members of this 
Committee have supported and personally donated to their local 
United Way, and others have played a significant role in 
raising donations for their local United Way.
    On behalf of our entire network, I want to extend our 
deepest thanks to each of you. Mr. Chairman, I am happy to 
answer questions.
    [The prepared statement of Mr. Crim appears in the 
Submissions for the Record on page 36.]
    Chairman Lee. Thank you. Thank you, very much, Mr. Crim.
    Dr. Osili, we will go now to you for your opening 
statement.

    STATEMENT OF DR. UNA OSILI, PROFESSOR OF ECONOMICS AND 
   PHILANTHROPIC STUDIES AND ASSOCIATE DEAN FOR RESEARCH AND 
INTERNATIONAL PROGRAMS, INDIANA UNIVERSITY LILLY FAMILY SCHOOL 
            OF PHILANTHROPY, IUPUI, INDIANAPOLIS, IN

    Dr. Osili. Chairman Lee, Vice Chair Beyer, and 
distinguished Members of the Joint Economic Committee.
    Thank you for the opportunity to testify today. The Indiana 
University Lilly Family School of Philanthropy has tracked 
crises and disaster giving since September 11, 2001. I will 
share initial evidence about philanthropy's response to the 
COVID-19 pandemic.
    Through good times, and during times of crisis, American 
philanthropy, which includes donors at all income levels and 
racial and ethnic backgrounds, has collaborated to fill gaps 
where governments and markets face limitations and provide 
capital for innovation and meet material and spiritual needs.
    Philanthropy, defined as voluntary action for the public 
good, is a core value, a central way for Americans to 
contribute to the vitality and strength of their community. In 
2018, Americans donated about $427 billion to charitable 
organizations, of which 68 percent came from living 
individuals. Four aspects of the philanthropic response deserve 
close attention.
    First, the COVID-19 pandemic has induced twin crises when 
Americans are grappling with unprecedented health and economic 
shocks. African American and Latino populations have been 
disproportionately impacted, exposing deep racial and 
structural inequities.
    In response, we have witnessed tremendous individual giving 
during the COVID-19 pandemic to charitable organizations, but 
also mutual aid to neighbors and friends. Beyond individual 
giving, U.S. foundations and corporations have contributed over 
$11 billion to the COVID-19 response based on Candid's 
estimates.
    Second, philanthropy's innovative response has included 
cash and in-kind donations from everyday citizens and donations 
from wealthy donors. Crowd-funding campaigns, typically driven 
by small donations, have expanded in their reach and impact. 
One of the most extensive GoFundMe campaigns, ``America's Food 
Fund,'' has raised over $26 million to combat food insecurity. 
And the CDC Foundation has raised $50 million on Charidy.com.
    Third, in the wake of the COVID-19 pandemic, we have also 
seen philanthropy as a unique collaborator and facilitator of 
collective action in local communities. A research initiative 
led by Dr. Laurie Paarlberg at the Lilly Family School is 
tracking philanthropy's facilitator role at the local level. As 
of May 15th, her mapping project estimates that community funds 
in cities and towns across America have raised $634 million and 
distributed at least $376 million to address critical needs 
created by the pandemic, including food insecurity, mental 
health, and emergency financial assistance.
    Finally, we have seen philanthropy tackle systemic issues 
of inequality. In Michigan, and here in Indiana, the 
collaboration of philanthropic organizations in each region 
rapidly joined forces to supply computer tablets with high-
speed internet connectivity to address the digital divide for 
K-12 students.
    Initial response to COVID is unprecedented in its speed, 
size, and scope. And nonprofits of all sizes have risen to the 
challenge. However, the need for private philanthropy is rising 
as many more people and communities need support, and at the 
very time when the ability of many donors to give is 
challenged.
    Research has long established that charitable giving is 
linked to national and regional economic trends. A concerning 
trend is that the share of American households that give to 
charitable organizations has declined significantly from 66 
percent in 2000 to 53 percent in 2016. Declines in 
participation rates among low- and middle-income Americans, as 
well as younger Americans, have been evident since the Great 
Recession.
    This trend of declining participation has implications for 
the strength and vibrancy of civil society. Over time, tax 
policy has also provided less tax recognition of the giving by 
all Americans, especially the giving of low- and middle-income 
Americans. The charitable deduction is one of the oldest 
tenants of the U.S. Tax Code and affirms the value society 
places on voluntary giving.
    The school has analyzed the impact of various policy 
options. Our studies project that extending the non-itemizer 
deduction could increase charitable giving available to 
nonprofits by up to $26 billion, an increase of about 7.7 
percent, and also increase the number of donor households by an 
increase of 8.2 percent in 2021, enabling a fairer, more 
inclusive, and a more engaged civil society.
    To meet the complex challenges triggered by COVID-19, 
creating tax incentives that encourage the generosity of all 
Americans, including lower- and middle-income households, is a 
vital step in the recovery, given the mounting needs of 
families and communities.
    Thank you for the opportunity to testify today. I would be 
happy to respond to any questions.
    [The prepared statement of Dr. Osili appears in the 
Submissions for the Record on page 38.]
    Chairman Lee. Thank you very much to both of you. We are 
going to now start into five-minute rounds of questioning. I 
will go first, and then we will go to Vice Chairman Beyer, and 
then, alternate between Republicans and Democrats after that.
    Mr. Crim, we will start with you today. The Social Capital 
Project of the Joint Economic Committee has done extensive 
writing and research about excessive government regulation and 
its tendency to act as sort of a drag on nonprofit and 
charitable activity, as well as government programs crowding 
out various civil society activities by effectively assuming 
civil society's functions.
    In other words, when government steps in the room it tends 
to consume so much of the oxygen that it tends to crowd out 
others.
    Mr. Crim, have you seen examples of either of those 
phenomena occurring recently, in the recent coronavirus policy 
response?
    Mr. Crim. I would say in the recent months what I have seen 
in Utah is a remarkable coming together of the private sector 
led by businesses of the charitable sector and of government, 
all I think staying in their lane. All listening to each other 
and looking for ways to add value and to get results in this 
moment.
    I do think what you are describing can happen, and it 
certainly does, but in the coronavirus response I have not seen 
examples of government overstepping here in Salt Lake or in 
Utah.
    Chairman Lee. I am glad to hear that, and that is 
heartening to hear. It sounds like you are acknowledging this 
can happen. It is a phenomena that we have to be aware of and 
we have to watch out for. But I am glad to hear that you are 
not seeing it yet.
    Mr. Crim, what do you think policymakers ought to do to 
avoid crowding out charitable relief efforts, while also 
ensuring that the needs of Americans are met? Are there some 
guideposts that you point to for us as policymakers to help 
make sure that we do not create this crowding out effect?
    Mr. Crim. Absolutely. And I would want to answer that 
question in part by observing that in our view none of the 
problems that we have been talking about today, and that we all 
care about, can be solved by one sector alone. Certainly not by 
one organization or set of nonprofits or their programs.
    Our view is that it requires deep partnerships of community 
members and their voices leading the way of nonprofits, and 
government, and private sector working in concert with one 
another.
    And I think the way to drive that and prevent what you are 
describing I think is to incentivize partnership within 
government funding. So if the policy that is being driven by 
the Federal Government, or by a state government, acknowledges 
that the problem it hopes to solve requires this kind of civil 
society and engaged partnership, and highly effective 
collaboration, and accountability for results, it seems to me 
like we could incentivize that partnership or require it in 
some cases as appropriate, so that programs do not--they do not 
happen in a vacuum. They do not create that crowding-out effect 
that you describe. Because there is a community-led, community-
based infrastructure set up to help everybody work together in 
a way that allows each sector and each organization to play its 
best role.
    Chairman Lee. Thank you, Mr. Crim.
    Dr. Osili, I wanted to ask you a question about an 
interesting set of facts that we have that are somewhat unique 
to our circumstance right now.
    The 2019 tax year filing deadline has been moved back to 
July 15th. In light of that fact, a lot of what we are going 
through right now, it seems to me that we have got an 
interesting opportunity. If we could enact legislation in the 
next few weeks making a change to allow people to add to their 
2019 tax liability, this function of what they donate this 
year, and count that toward 2019, what effect would that have 
on charitable contributions right now given the timing of when 
charitable donations have been made in the past, and given this 
unique circumstance of the coronavirus-related lockdowns, and 
the extension of the filing deadline?
    [Pause.]
    Dr. Osili, I think you might be muted. We cannot hear you.
    Dr. Osili. Okay, thank you, Chairman, for your question. 
And I do agree that this is an important opportunity to 
recognize the generosity of all Americans. The point that you 
raise is a good one. Tax salience is a theory and actually has 
been found to affect the behavior of Americans, and providing 
that tax incentive now rather than later, could stimulate 
additional giving.
    In addition to the work that I cited in my testimony, we do 
know from previous disasters that a large number of Americans 
contribute to disasters. As an example, in the 2017 Hurricane 
Harvey and 2018 series of natural disasters, 30 percent of 
Americans gave. And the average contribution was about $300.
    Given the scale of this pandemic and the fact that it cuts 
across all communities, providing the tax recognition now, as 
well as in the future, I think it will be important given the 
timing of this crisis and the length and severity.
    Chairman Lee. Thank you very much. My time has now expired. 
So now we are going to go to Vice Chairman Beyer for his round 
of questions.
    Vice Chairman Beyer.
    Vice Chairman Beyer. Mr. Chairman, thank you very--Chairman 
Lee, thank you.
    To our witnesses, the CARES Act that we passed, part of our 
coronavirus response, expanded the charitable giving caps for 
individuals and corporations. So individuals are now able to 
deduct up to 100 percent of their adjusted gross income in 
2020. It was 60 percent. And corporations saw their cap lifted 
to 25 percent from 10 percent.
    Dr. Osili, should we also be looking at foundations? Right 
now, the minimum foundation distribution over the year is 5 
percent----
    Chairman Lee. Mr. Vice Chairman, apparently your video feed 
is off. I just thought you should know that.
    Vice Chairman Beyer. Oh, I did not----
    Chairman Lee. That's ok, you are free to participate with 
it off.
    I just wanted to make sure that was deliberate and not 
accidental. Go ahead.
    Vice Chairman Beyer. Thank you, Senator. It was not, 
actually--whatever. Dr. Osili, on foundation, 5 percent right 
now. Should we consider doing a 10 percent distribution per 
year? And what kind of impact would that have on the nonprofit 
sector?
    Dr. Osili. An excellent question. I think that the CARES 
Act does go far in recognizing the generosity of corporate 
America as well as individuals. And as I cited in my testimony, 
we have seen significant response from corporations, especially 
at that million dollar level.
    We have also seen significant investment by foundations 
across the country, and I think we have also seen from prior 
research that foundations tend to give in a counter-cyclical 
manner. In other words, during tough economic times foundations 
tend to increase their giving. We saw that during the Great 
Recession.
    So certainly incentivizing all forms of generosity during 
this time I think will certainly move in the right direction in 
helping Americans cope with the scale and, as we said, severity 
of this current crisis.
    Vice Chairman Beyer. Thank you very much. When we make 
changes to the Tax Code, we are trying to find ways to 
incentivize changes at the margin. So we do not want to reward 
people with a tax benefit for actions they are going to take 
already, because it would cost the government money that we can 
use for other things.
    So when it comes to charitable deductions, some would argue 
that we should give tax benefits only above levels at which we 
would expect people would give. For example, there is some data 
that suggest the average person who gives would give up to 2 
percent of their AGI. This would reduce the cost of the benefit 
a lot. How do you react to that notion, that we create tax 
incentives beyond the 2 percent per year that they would be 
expected to give?
    Dr. Osili. I think those are all very important points, and 
they have been very significant to date about the limitations 
of the CARES Act. In other words, could it go further?
    Some have argued that the limit currently is too low at 
$300. Others have charged that the primary beneficiaries are 
mostly higher-income households. It is important as we think 
about other policy options to address a lot of the issues that 
I think the Chairman already touched on, looking at the 
fraction of Americans that donate, the size of the charitable 
response, as well as some of the distributional consequences.
    In other words, tax equity. We want to reward generosity 
across all Americans, lower-income, middle-income, and wealthy 
households, understanding that all Americans play a role.
    To this end, the school has conducted a very detailed study 
of all different sets of options. In fact, we considered five 
different policy options. And these policies actually differ on 
their impact on the number of donors. In other words, how many 
people would actually participate; the amount that would be 
raised; and the cost to Treasury.
    The good news here is that all of the options that include 
extending the deduction to non-itemizers would actually forego 
less in tax revenue than it would bring in in charitable 
dollars. In other words, a small impact on the Treasury, while 
boosting overall charitable giving.
    Just to give you--I think some of this was covered in my 
testimony, but one of the examples that I cited, extending the 
non-itemizer deduction, would bring in an increase of 7.7 
percent in charitable dollars, would increase donors by 8 
percent, and the Treasury revenue impact is relatively small, 
reducing revenue by 0.6 percent.
    So we have considered the various options and looked at the 
impact on donation levels, participation rates which are very 
important and we want to encourage tax recognition for all 
Americans, and then finally the impact on Treasury as well.
    So I think all of those have to be considered as you 
investigate what the best set of policy options are. But one 
principle that I think is important to keep in mind is that 
Americans of all different backgrounds participate in 
charitable giving. We want to pursue policies that actually 
recognize that spirit of generosity across the income spectrum.
    Vice Chairman Beyer. I am certainly excited about your 
first ever institute for studying philanthropy. Obviously you 
are bringing a lot of that to this, to us today already.
    So, Mr. Chairman, I yield back.
    Chairman Lee. Thank you very much, Vice Chairman Beyer. Up 
next is Representative Herrera Beutler.
    [No response.]
    Representative Herrera Beutler, make sure you are not 
muted, and make sure your audio and your video feeds are on.
    [No response.]
    Okay, Representative Herrera Beutler, we will come back to 
you. Next we will go to Representative Schweikert.
    Representative Schweikert. Hi there. Thank you, Mr. 
Chairman.
    It is an interesting subject. Having been someone who 
actually worked on the Tax Reform and some of the data we were 
seeing, Doctor, can I ask you to--you shared with us in your 
opening testimony some of the information from, what was it, 
2000 to 2016?
    Dr. Osili. Correct. The data that I cited is based on the 
Philanthropy Panel Study. It is a module on the Panel Study of 
Income Dynamics of American Families, the longest and most 
comprehensive study of philanthropy that has ever been 
conducted on American families. And that data allows us to 
study over time how American philanthropy is changing.
    And because we are able--that's the beauty of longitudinal 
data--we are able to assess over time the same group of 
households. We have seen that declining rate in the 
participation of American households.
    Representative Schweikert. And you are actually coming to 
exactly what I wanted to get my head around. Because this is--
prior to tax reform, we had had some presentations a couple of 
years ago, of discussions that there were going to be changes. 
There were changes being observed in participation. Somewhat 
because of demographics. Somewhat because of income squeezes in 
a couple of the lower-income quartiles.
    When you talk about--and what was that? Close to a 10 point 
drop over that study's time? How much of that--where does that 
drop fall? Was that in people of more modest income? Where was 
the drop coming from?
    Dr. Osili. A very good question, and thank you for 
following the research so closely. We have examined in great 
detail where the drop came from, and about half of the drop can 
be attributed to income--decreases in income and wealth. So we 
found it mostly from lower-income and middle-income Americans. 
But also among younger Americans, and individuals with less 
education.
    Now this trend was accelerated by the Great Recession. The 
Great Recession did have the impact of reducing further the 
participation rates of Americans. The overall trend, the way we 
tend to describe it, is donors down, but dollars are up or 
holding steady.
    And so one of the challenges that we look at, all of the 
factors that you have cited, demographic change, changes in our 
social and economic life, and also changes in religious 
attendance. We are seeing this declining rate, and the 
challenge of course especially for younger Americans to make 
sure that we can encourage that habit of charitable giving 
which has been such a hallmark of American life for centuries.
    Representative Schweikert. That is actually a very 
interesting point. And, Mr. Chairman, for others who have an 
interest in this area, some of us who have spent some time 
looking at this, we were already seeing a trend, and it may 
have been tied to lower quartiles income, their true purchasing 
power, the squeeze that we were seeing in our society. And 
there were many of us who had hoped as we saw income move up in 
those populations, as we were seeing before the pandemic, it is 
not a long enough time frame to see, was there a change in 
those more modest incomes' participation in sort of a level of 
personal philanthropy.
    But as we work on policy, I think we have got to be very 
careful to sort of see the world in the last three months, or 
the last two years, and it might be much healthier to sort of 
look at this over the last 20 years of what is the trend in 
income distribution, and who is giving money to charity.
    Also, some of the things we were seeing--and I wish I had 
made some charts for this conversation, of demographics of how 
much of our population was moving out of the workforce because 
of getting older, and what sort of contributions of cash 
instead of contributions of time and talent.
    So this may be one, before we make some really big policy 
approaches, we may need to much better understand the data.
    Dr. Osili. Absolutely. I think you raise a very good point 
about demographics, and that is one that here at the Lilly 
Family School we have been watching very closely. For younger 
Americans, one of the key issues is charitable giving tends to 
be one of those habits. People who give, many of them give year 
over year, or they may stop giving and then start up again. And 
one challenge we have is for many younger Americans, they 
entered the labor market around the Great Recession, many of 
them faced economic challenges, and a lot more income 
insecurity perhaps than generations before them.
    And so for that cohort, one of the questions is: How do we 
encourage charitable giving for that younger cohort? 
Understanding that they will then start to promote giving, 
become regular givers, and ultimately perhaps pass that on to 
their children because giving is also something that we do see 
closely linked across families. In other words, parents tend to 
transmit generosity to their children.
    Representative Schweikert. Doctor, one last question, and I 
appreciate everyone's patience. Senator Lankford sort of 
touched on this, and I see this in the world around me, that 
many of the younger, my millennial relationships and 
acquaintances, they do more direct type of contributions. The 
GoFundMe type of pages, the much more community-centric.
    Does that type of contribution hit your data points? And 
are we seeing a societal trend that is different in how they 
contribute on an individual basis instead of to larger 
charitable organizations?
    Dr. Osili. Those are both excellent observations. We are 
seeing giving expanding, and even during the pandemic we have 
seen giving of all forms, giving to nonprofits, but also giving 
to crowd-funding campaigns.
    What is interesting to note, however, is that even 
traditional nonprofits are starting to use crowd-funding to 
raise funds. And that is why I gave those two prominent 
examples that have raised the most dollars on GoFundMe and are 
actually nonprofits such as America's Food Fund, and similarly 
the CDC Foundation, a well-established organization dating back 
to 1994, the Foundation itself that has also launched a 
crowdfunding strategy raising up to $50 million on a new 
platform.
    So we are seeing hybrids of both the new and old kind of 
blending together during the pandemic.
    Representative Schweikert. Doctor, the one thing I was 
trying to chase down is: Do we see a difference in the age 
group that will go and contribute through a GoFundMe? And as we 
are saying we are seeing younger donors reducing their 
charitable participation, is there a chance that some of the 
charitable participation is just using different platforms?
    Dr. Osili. I think that is a very good question, and one 
that we are studying very closely. Initial evidence does 
suggest that younger donors tend to use social media. And a lot 
of those crowdfunding platforms are driven by social media.
    Representative Schweikert. Doctor, thank you so very much. 
And, Mr. Chairman, I yield back.
    Chairman Lee. Thank you. Thank you very much. We will go 
now to Representative Trone.
    Representative Trone. Thank you, Mr. Chairman.
    Dr. Osili, supporting charities and the people who depend 
on them through the pandemic and beyond requires a 
comprehensive approach. The CARES Act made charities eligible 
for the PPP, and the Employee Retention Tax Credit.
    The HEROES Act would dramatically increase the Employee 
Retention Tax Credit from 50 to 80 percent, and increase the 
wage cap. Beyond these immediate programs, do you have any 
other recommendations additional for legislative support that 
would be most beneficial to U.S. charities, whether they're 
working here or even internationally?
    Dr. Osili. One of the points I think my fellow panelists 
mentioned is the importance of collaboration during this time. 
And I do think as government looks at how to support the 
nonprofit sector during this time, incentivizing collaboration 
with partnerships could be another way of supporting 
nonprofits.
    I think the government already does a fair amount of that 
in international relief, but looking at ways of doing that. 
And, I would add, also incentivizing innovation. In other 
words, nonprofits that are solving very complex problems having 
the support of government funding to put some of those 
breakthrough solutions in communities around the country.
    Representative Trone. Okay, great. Down the road, should 
the Legislative Branch consider permanent restoration of tax 
deductions for charitable contributions, recognizing that these 
come at a big cost in the reduction of tax revenue, or the more 
effective and cost-efficient ways to support these 
organizations and the important contributions to their 
communities?
    Dr. Osili. Being an economist by training, I do think it is 
important to look at the cost of various policy options. When 
it comes to the charitable deduction, we do have significant 
evidence that when properly implemented the tax deduction 
stimulates more in charity dollars, or at least as much, 
relative to its cost to Treasury.
    And as we have researched the impact of expanding the 
charitable deduction, what we have seen is that encouraging the 
generosity of Americans during this time, but certainly into 
the future, is something that will help build our civil 
society, and especially as we are seeing this declining 
participation rate will encourage Americans of all backgrounds 
to continue this tradition of civic generosity.
    Representative Trone. That is good. Thank you.
    What trends are you seeing in the data that you think we 
should know about and factor into legislative action to support 
charities, particularly during the pandemic? And where are we 
not looking where we should be?
    Dr. Osili. I think several of your colleagues have brought 
up very important points. One advantage of philanthropy during 
this time is the speed and the ability to respond to local 
problems.
    One area that I do think deserves close attention is the 
work of community foundations and community funds. The scale 
and scope with which they have acted already I think is worth 
noting. Finding ways to partner at the community level, 
especially in really affected regions, could be very beneficial 
at this time.
    Representative Trone. Okay, thank you, Doctor. I yield 
back, Mr. Chairman.
    Chairman Lee. Great. Thank you very much. We will turn now 
to Representative LaHood.
    [Pause.]
    Representative LaHood, you are now recognized. And make 
sure your mute button is off and your video feed is on.
    Representative LaHood. Okay. Can you hear me, Mr. Chairman?
    Chairman Lee. Yes, I can hear you fine. There you go. Go 
ahead.
    Representative LaHood. Alright, thank you, Chairman Lee, 
for holding this important hearing, and to co-chair Beyer.
    I want to thank the witnesses for your valuable testimony 
today on this important topic. And I just will acknowledge the 
important role that our charities and nonprofits play in our 
communities all across our country.
    They have particularly been highlighted during COVID, and 
the reliance--and I think in my own community as I have been 
traveling around my district in the central and western-central 
Illinois area, the Midwest Food Bank, which has been helping 
with food and nutrition programs throughout the country and in 
my district, obviously the Salvation Army has been very engaged 
in the Peoria Green Center in my community here helping with 
shelter and clothing and the health needs of our community,
    As was referenced earlier, when we think about the social 
safety net of our country, obviously family is first and 
foremost, but the nonprofits play a significant role. And 
obviously government does, too.
    But I think one thing we have learned in our response to 
COVID on the Federal level is we are not going to spend our way 
out of this from a government standpoint. And so when we look 
at our charities and our nonprofits, how do we incentivize? How 
do we stimulate? How do we assist, using the Tax Code, in a 
proactive way to help those charities and those nonprofits?
    And so having this hearing today and the valuable testimony 
is a part of that moving forward. So thank you for having it, 
Chairman Lee. It is very, very important.
    And I would like to maybe ask the Doctor, what have we--in 
terms of COVID and the impact that it has had on our country 
over the last 10 or 11 weeks, what have we seen in terms of a 
reduction in giving to COVID? And what are the projections in 
terms of losses related to that moving forward?
    Dr. Osili. So it is too early to tell at a comprehensive 
level what the impact of COVID has been on fundraising revenues 
so far. We did conduct an early survey in March to a national 
sample of nonprofits and found that nearly 80 percent of them 
had encountered some disruption in their plans around whether 
it was canceled events, canceled fundraising programs. However, 
what we have also seen in the data is that the impact is not 
going to be uniformly felt across all nonprofits.
    Some sectors will be affected to a greater extent than 
others. As an example, arts organizations are particularly 
vulnerable during an economic downturn. And in this crisis, 
there are various streams of revenue for arts organizations 
have been disproportionately impacted.
    Event revenue may be down. Similarly, if you look across 
the nonprofit span, there are over 1.3 million nonprofits in 
the U.S., but we have seen that in an economic downturn some 
nonprofits are more affected than others.
    So I think it is too early to say exactly what the impact 
will be on the charitable dollars, but it is already apparent 
that some nonprofits are being hit harder than others.
    Representative LaHood. Thank you for that. Just as a 
follow-up, so obviously we have talked a little bit about tax 
incentives and direct financial assistance. Are there other 
Federal policy recommendations that we should focus on beyond 
those two, Doctor?
    Dr. Osili. Those are all very good points. Looking back at 
periods of crisis and how nonprofits have fared, I think what 
we have seen already is that putting together various types of 
policies is very important, but also tailoring some of these 
policies to specific sectors can be important.
    For example, right now we know that health and human 
service organizations are particularly affected. So looking at 
the impact of those sectors can also be beneficial.
    Representative LaHood. And lastly, maybe if you could 
comment on how state or local governments play a role in 
supporting our nonprofits and charities.
    Dr. Osili. Very good. So across the country, that is a 
great question. We know that states and local governments are 
also at the front lines of this crisis. In our Tax Code, we 
have a Federal tax policy, but we also have many communities 
and states that have local and state level credits for 
different types of contributions.
    There have been a number of studies on this topic. One of 
my economist colleagues, Dr. Nicholas Duquette at USC has an 
academic paper that looks at the impact of these various 
credits. And some of them have been effective in actually 
stimulating charitable giving, more so than others.
    And so I think that would be a place I would ask the 
Committee to take a look at. So looking at specific policies 
that have been more effective in various parts of the country, 
Arizona being one. Michigan is another one. But taking a look 
at some of those options, and how perhaps some of those can be 
built upon.
    Representative LaHood. Thank you, Doctor. Those are all my 
questions. Chairman Lee, thank you for the hearing today, and 
we look forward to working with you on coming up with policy 
recommendations and potential legislation on this topic.
    Chairman Lee. Thanks, Representative LaHood. We will turn 
next to Senator Hassan.
    Senator Hassan. Thank you, Mr. Chair. Just checking that 
everybody can hear me?
    Chairman Lee. Yes, we can hear and see you. Thank you.
    Senator Hassan. Excellent. Thank you, Mr. Chair, and Vice 
Chair Beyer, for holding this hearing today. And I would also 
like to thank our witnesses, Dr. Osili and Mr. Crim, for 
appearing before our Committee.
    I also want to thank Senators Shaheen and Lankford for 
their leadership in supporting nonprofits.
    To Dr. Osili, you have spoken before about how the 
nonprofit sector fills in gaps between services offered by 
government and by the business community. That is exactly what 
I have seen in New Hampshire throughout this crisis.
    Nonprofits in my state have stepped up to meet new needs 
for housing, health care, employment, and education services, 
while also modifying existing services to limit the spread of 
COVID-19.
    Could you explain to the Committee how nonprofits are 
uniquely positioned to use flexible and innovative services to 
fill in these gaps, especially during the COVID-19 public 
health and economic crisis?
    Dr. Osili. That is an excellent question, and I appreciate 
the opportunity to shed light on this. I mentioned in the 
testimony, we have two very prominent examples nationally. When 
public schools transitioned from bricks and mortar schools to 
e-learning and virtual learning, it was quickly apparent that 
many children, K-12 students across the country did not have 
access to high-speed internet connectivity, or tablets or 
computers in their homes.
    And private philanthropy stepped up very quickly, within a 
matter of weeks, to make sure that children affected by those 
shutdowns, which took place very rapidly, had access to a 
tablet or a computer and internet connectivity so that they 
could resume their studies.
    That was really something that made a difference during the 
pandemic, and I think it speaks to philanthropy's flexibility 
and ability to work in partnership with local governments, 
because the philanthropists had to work with the school 
districts, as well as the business sector that stepped forward.
    This is a uniquely, as we said, a unique aspect of American 
society. That is one example. We have also seen in the health 
component where many companies, foundations, and individual 
donors stepped up very quickly to provide PPE for health 
workers, to provide and expand rapid testing, and in some cases 
to actually fund research.
    We saw that in California and in Seattle, in the Washington 
area. Oregon is another good example. And then even here in my 
home State of Indiana. Private donors worked very rapidly; that 
would have taken longer for government to pass a bill to get 
those funds, and the PPE in the hands of the health workers.
    So I think this is an example where we see the strength of 
philanthropy and the importance of the sector in the face of a 
crisis.
    Senator Hassan. Well thank you. And I also wanted to give 
Mr. Crim an opportunity to answer the same question.
    Mr. Crim, how in your experience are nonprofits filling 
gaps in services during COVID-19?
    Mr. Crim. Well, maybe not surprisingly I would echo many of 
the same things that you just heard. I will not take up too 
much time, but to say that what I have noticed is that the 
speed with which a nonprofit, or a group of nonprofits can 
rally around a problem is super important.
    It is often the case that they cannot scale their solution 
sufficiently. So we saw similar work going on in terms of 
broadband access around distance learning. But we are still 
quite certain that 50 percent of kids in our community, many of 
our communities, did not have a reliable connection to their 
school.
    So I think to solve these problems we have to rely on the 
speed and the nimbleness of nonprofits, and the scale and 
capacity of government.
    Senator Hassan. And that has been my experience in New 
Hampshire, too. So thank you for that.
    And then, Dr. Osili, I wanted to give you a chance to 
expand a little bit on a topic that was just raised in our last 
round. The testimony we have heard today underscores how 
crucial it is that Congress assist nonprofits that are on the 
front lines during COVID-19.
    Although the Congressional response so far has ensured that 
nonprofits have access to the same economic relief as 
businesses, significantly more needs to be done to help these 
nonprofits stay on firm financial footing. I would add, so that 
they can continue to do the kind of work that both of you have 
just described so well.
    Several colleagues on this Committee, including Senator 
Klobuchar, are leading important efforts to provide direct 
financial assistance to struggling nonprofits. Given the 
unfortunate delay in nonprofits getting access to the Federal 
Reserve's Main Street loans, the need for this assistance is 
all the more urgent.
    Dr. Osili, between dramatic growth in need for nonprofit 
services, and a significant decline in financial resources, 
could you explain how the COVID-19 crisis is affecting 
nonprofit operating budgets?
    Dr. Osili. Thank you. We, as I mentioned earlier, conducted 
a study early in the pandemic. So we know that this is a fast-
changing landscape. And with a national sample of nonprofits, 
we found that 80 percent of them had encountered some sort of 
disruption to their overall planning. Fifty percent had 
canceled fundraising events that were a big part of their 
projections. And as they looked ahead, some anticipated a 
decline in their fundraising revenue, currently, but also in 
the future.
    So I think all of this data taken together suggests that 
the shocks that our country has encountered have hit the 
nonprofit sector as well. And as I mentioned, some have been 
disproportionately impacted. I think there is not a one-size-
fits-all solution. When we talk about nonprofits, we have to 
look by sector, and also regionally as well.
    Senator Hassan. Well thank you. And, Mr. Chair, I see that 
I am over time. Mr. Crim, my staff and I will follow up with 
you, as well, just to make sure we get your input on that same 
issue. Thank you.
    Chairman Lee. Representative Herrera Beutler, you are up 
next.
    Representative Herrera Beutler. Alright, thank you. Can you 
all hear me?
    Chairman Lee. Yes, we hear and see you fine. Thank you.
    Representative Herrera Beutler. Thank you. I had a sick kid 
this morning, so I have been checking in and out of this, but 
it is nice to be able to come in towards the end. And I 
apologize if some of this has been covered, but for my benefit 
these are things I have been talking about with nonprofits, and 
not-for-profits here in Southwest Washington State and I wanted 
to ask a few things.
    You know, the last question. So obviously while businesses 
have stepped up in amazing ways, and they have played roles 
where traditional business or government could not step in, and 
they were able to respond quickly, which is what we want and 
need, which is why a lot of the relief available to Main 
Street, available to nonprofits.
    One of the questions that keeps coming up is: Do we feel, 
or do you feel that we should be treating donations differently 
from a policy standpoint based on the type of entity receiving 
the funds? I know the devil is always in the details, but these 
are the things we are being asked to figure out, and I would 
love to hear your thoughts on that.
    Dr. Osili. Thank you. And I am answering this question as a 
Professor of Economics, as well as Philanthropic Studies at 
Indiana University.
    What to keep in mind about American philanthropy is that it 
is really an expression of democracy. Several analysts and 
commentators have noted American philanthropy starting with 
Tocqueville, about the ability of Americans to form 
associations, and the fact that they form these associations 
across different sectors, different types of organizations, and 
that plurality is one of the strengths of America's 
philanthropic sector.
    As we think about shifts in tax policy, I think that 
creativity, innovation, and resilience that we have already 
seen has actually been part of America--the fabric of America's 
philanthropy.
    So I'm not sure that we can have both. In other words, 
encouraging that plurality, providing benefits that accrue to 
different subsectors, does have benefit. At the same time, you 
could also see some arguments that in this crisis there are 
some organizations that are at the front lines of the 
pandemic--health organizations, disaster relief--but then all 
kind of nonprofits are involved in this crisis.
    If you look at educational institutions, many of them are 
having to grapple with new ways of providing their services. 
Many religious congregations are standing up entire operations 
around food insecurity or domestic violence.
    So we do see that many organizations, many different types 
of organizations, involved in pandemic relief, and the strength 
of the sector has been in its plurality and expression of 
democracy, you could say.
    Representative Herrera Beutler. Mr. Crim, any comment?
    Mr. Crim. I would agree with that observation. At this 
point, from a personal level, one of the beautiful things about 
philanthropy in the United States is the ability of someone to 
express their values and their passions through their giving. 
And I think that happens naturally, the way things are.
    Representative Herrera Beutler. I think, you know, I was on 
the phone with a local not-for-profit involved in the arts, 
local theater and, you know, depending on the type of nonprofit 
you are talking about, they were either, you know, pushed to 
the forefront of our consciousness in our communities, or they 
were, you know, kind of pushed to the back based on what is 
happening.
    You mentioned churches who are kind of doing wrap-around 
services for frontline providers. Well, you know, there are 
others who are I think have just as vital a role to play in our 
communities, but obviously are not getting top of mind. And 
trying to figure out how to protect and keep some of those 
folks afloat in the middle of this has been a bit of a 
challenge, at least in our communities.
    And that just brings to mind another question that I have 
had. I almost hesitate to bring it up because obviously we have 
been talking about the vital role that not-for-profits play. 
One of my first jobs was working for a nonprofit with regard to 
young people, and I did development, and it is a thankless task 
but you do it because of the cause. It is the most amazing 
thing to be a part of.
    But we do have some entities who are abusing their not-for-
profit status, who are laying off employees, right, despite 
significant endowments in addition to tax-exempt status.
    How can we support and encourage charitable giving while 
ensuring that we are setting the stage to kind of call some of 
those into accountability? It's not as fun of a question.
    Dr. Osili. That is certainly a challenging set of 
questions, and we see that across all sectors. I do not think 
the nonprofit sector is unique in that respect. I think some of 
the same standards and policies that have been applied in the 
CARES Act for other types of entities could also be extended to 
nonprofits. And, similarly, incentives to retain staff and 
navigate the crisis could also be introduced.
    So I do believe that the issue of perhaps fraud, or 
accountability and transparency does cut across all sectors, 
but particularly in the nonprofit sector trust is a really 
important factor. That is the glue that holds the sector 
together. And so as we think about incentives, keeping that 
trust and accountability in mind, I think is important.
    Representative Herrera Beutler. Thank you. And I see my 
time is up, so I yield back. Thank you.
    Chairman Lee. Thank you so much. We are now going to start 
a second round. For any of you who would like to stay with us, 
you are free to stay on. Feel free to drop off if you do not 
have any interest in participating in a second round, but we 
will go ahead and begin that now.
    Mr. Crim, let us go back to you for a moment. I think all 
Americans have been affected by the pandemic in some way or 
another. But Americans who were disadvantaged economically and 
otherwise prior to the pandemic are experiencing greater 
hardship compared to those who are more educated, or have more 
resources, or had more income prior to this issue surfacing.
    What are some of the specific ways, Mr. Crim, that 
charitable giving, and by extension charitable organizations, 
have met the needs of low-income or less-educated Americans 
during the pandemic?
    Mr. Crim. Well I think what I have seen is that in much the 
way I think Dr. Osili talked about, the research shows money in 
a crisis flows to basic needs. It flows to the urgency that 
people see. And we see that in our own experience, that 
philanthropists and individual donors, and corporations, that 
people rally when there is a need, and nonprofits provide a 
vehicle to quickly get those resources to those with the 
greatest needs--2-1-1, which is a national infrastructure 
connecting people to the services that are available to them 
statewide in Utah, and in most of the country, does a pretty 
good job of in real time assessing what are the needs that 
people are calling about, or searching for online.
    I think there is more responsibility we all have, though, 
to think about recovery in an inclusive way; to think about 
creating structures, and systems, and filling gaps in the long 
run that try to mitigate the problem that you just described so 
well.
    So that the next time there is a crisis, whether it is a 
natural disaster or a health crisis, maybe we are a more 
equitable society. Maybe people have a better capacity to 
weather a storm. And so in our community, there is an overt 
conversation going on about inclusive recovery, and how do we 
create systems, whether they are education systems, or economic 
systems, or health systems that think about the disadvantaged 
and the inequity that existed before the pandemic, and try to 
create something new going forward.
    Chairman Lee. Thank you. And then on a related point, Mr. 
Crim, we know that the pandemic has in many cases, and in 
countless ways, increased the demands on churches, schools, 
nonprofits, and other institutions of civil society. And we 
know that, at the same time and for the same reasons, the same 
underlying reasons, it is also reducing donations as people are 
feeling more uncertain about their future and are less inclined 
to give.
    Do we know how much the pandemic may have affected 
donations to charitable organizations?
    Mr. Crim. I do not have data that is sector wide, or even 
beyond our own organization. I can say anecdotally that, you 
know, we have seen both a loss in donations, individual 
donations, and overall planned revenue. We have seen unexpected 
increases in some revenue directed towards pandemic relief. And 
then we have seen, you know, some visionary philanthropist who 
is really thinking, as I mentioned before, about inclusive 
recovery. How do we change the system to make it more equitable 
for kids, for example? Is there a way to tackle the broadband 
issue that is not piece-by-piece in a family-by-family, but 
that really thinks about the future of our economy and people's 
ability to participate in that economy that starts with 
equitable internet access, broadband access?
    Chairman Lee. Do you have any idea of what types of 
organizations might have been most affected by reductions in 
charitable contributions? You say you have seen some revenue 
loss, meaning donations overall I assume are down. Do not tell 
me anything that is sensitive, but do you have any sense as to 
who is getting hit the hardest in the charitable world?
    Mr. Crim. My anecdotal sense, and I would defer to Dr. 
Osili for hard data, is that it is organizations that are not 
directly on the front lines of pandemic relief and/or really 
small organizations that do not have the infrastructure to 
sustain their fundraising efforts in a different kind of way.
    Chairman Lee. Dr. Osili, what is your reaction to that 
question? Do you have any sense as to what types of 
organizations have been most affected by reductions in 
charitable giving?
    Dr. Osili. Yes. So we have some very strong evidence from 
the Great Recession. During the Great Recession, we saw human 
service organizations, charities, actually experience an 
increase in their fundraising, in their charitable giving, 
whereas other sectors, for example, arts and culture 
organizations, in some cases environmental groups, actually saw 
a decline.
    So very similar to Mr. Crim's observations, organizations 
that were serving basic needs at the front lines of this, in 
this case it was an economic crisis, saw an increase in their 
charitable giving, whereas organizations that were less 
involved in responding to basic needs and emergencies saw a 
decline.
    Something, just a small piece of data that I shared 
earlier, as I mentioned, 80 percent of the national sample that 
we surveyed had already seen some disruption in their planning 
for this year. And for many organizations, it was the 
cancellation of fundraising events. And that was fairly 
widespread, but tends to be concentrated in some sectors. And I 
mentioned the arts, but other subsectors that rely heavily on 
charitable events--walks, runs, all those types of fundraising 
activities--that have been canceled.
    Chairman Lee. Thank you. Vice Chairman Beyer, you are up to 
bat next.
    Vice Chairman Beyer. Mr. Chairman, thank you very much. Dr. 
Osili, I cannot tell you how many Saturday nights back I have 
now that all those fundraising events have been canceled on 
Saturday nights.
    I lived overseas for four years, and one of the great 
surprises in Europe was that they do not have this tradition of 
the nonprofits for the charitable giving that we do, you know, 
that we are sort of raised with, the whole idea of raising the 
barn, or all the community coming together to bring in the 
crops. That just does not seem to exist over there.
    And one of the things that I have enjoyed learning on this 
Joint Economic Committee, with Chairman Lee's help, is the 
incredible role of social capital in our American lives. I'm 
constantly pushing my kids to be ever more involved in the 
community. And, that we begin to think of measuring our own 
wealth by virtue of the social capital that we have in the 
community that we live in.
    And at home I find that I am measuring the social capital 
by the strength of the nonprofits, that the more robust they 
are, the greater the sense of community and social capital that 
we all have.
    So I guess my question, both to Mr. Crim who has been doing 
this for decades, and for Dr. Osili, how do we nurture this 
commitment to nonprofits, and to building our social capital?
    Mr. Crim. Well I will start by saying I think you mentioned 
starting with your kids, engaging kids in volunteer work, 
creating volunteer opportunities, bringing people together to 
address challenges collectively, I think is one way to do that.
    I think communities that try to build social capital not 
only when there is a crisis, but that really look for ways to 
overcome sometimes the inadvertent divisions that occur, and 
sometimes the overt divisions that occur in communities, is 
super important.
    I am sure those of you who study this are well aware of the 
different kinds of social capital, the bonding social capital 
where we connect with people who look like us, and think like 
us, and maybe are in our same income bracket. That is the type 
of social capital that is relatively easy to create, but I do 
not think that is what makes our country the strongest. What 
makes our country the strongest I think is bridging social 
capital. It is the social capital we build across differences, 
and that allows us to come together and do hard things.
    Vice Chairman Beyer. Thanks.
    Dr. Osili.
    Dr. Osili. I am glad you raised the point about 
international differences. Here at the Lilly Family School we 
have two large projects that look at differences across 
countries in philanthropy. And certainly the sociocultural 
fabric of our country has enabled the growth and the strength 
of civil society.
    But going forward, I think providing incentives that 
encourage, as we talked about, charitable giving, and also 
strengthen the sector, that infrastructure becomes very 
important.
    And at the household level, I would agree with Mr. Crim 
that what we've also seen in the data is that families play a 
very important role in transmitting generosity. Parents tend to 
teach their children, in some cases grandparents are also 
involved in establishing this tradition. And that goes for 
giving, but also to volunteering.
    We do see that volunteering has a twofold effect, 
volunteering as a family, that increases not just the 
children's volunteering but also their giving when they become 
adults. So I think we need to look at all the different ways--
time, talent, treasure--and increasingly with the advent of 
social media, testimony. Getting Americans to share their 
stories about why they give, and the causes that matter the 
most to them, and also be inspiring. And in this pandemic, I 
think we have seen an explosion in the use of social media 
around charitable giving.
    Vice Chairman Beyer. Dr. Osili, one last question. In the 
current crisis we have talked a lot about automatic stabilizers 
for food stamps, for unemployment insurance. Have you thought 
about any way to automatically use stabilizers for nonprofits 
in times when people get in trouble, when the economy turns 
down?
    Dr. Osili. I think one way to do that is really having 
strong anchors at the community level. And that can include, as 
we have already seen, United Ways and community foundations, 
but also national associations and state-level associations of 
nonprofits can provide that type of support during times of 
crisis.
    We are seeing that happen in many communities around the 
country with these community-level funds that we discussed. 
Some states do have incentives for donations to community 
foundations specifically, but really thinking about the 
institutional fabric, or the infrastructure that so many 
nonprofits lean on in times of crisis I think is important.
    Vice Chairman Beyer. Thank you. I yield back. Thank you, 
Mr. Chairman.
    Chairman Lee. Representative Schweikert.
    [No response.]
    David, are you still there?
    [No response.]
    Okay, Representative Schweikert, if you're there, speak. 
Speak up, or shoot me a text, or give me a call. Otherwise, I 
think we are going to wrap up here in a moment.
    I really want to thank our witnesses again for being here. 
Dr. Osili and Mr. Crim, your testimony and your answers to our 
questions have really been invaluable. And I am also grateful 
to Senator Lankford and Senator Shaheen for their insight.
    Should any Member of this Committee wish to submit 
questions for the record, the hearing record will remain open 
for three business days. For participants on WebEx, you will 
hear the Senate Recording Studio announce that the public 
lectern live statement has ended. Until that point, Members and 
witnesses' microphones will still cause the video to shift to 
them if you are left unmuted. So maybe you are still on. Just 
be aware of that.
    I also want to thank the staff of the Senate Recording 
Studio, the Sargent-At-Arms for the Rules Committee, and the 
Architect of the Capitol and the Capitol Police, and the Joint 
Economic Committee staff, all of whom have made it possible for 
us to hold this first-of-its-kind hybrid hearing of the Joint 
Economic Committee.
    The hearing now stands adjourned. Thank you.
    [Whereupon, at 4:14 p.m., Tuesday, June 9, 2020, the 
hearing of the U.S. Joint Economic Committee was adjourned.]

                       SUBMISSIONS FOR THE RECORD

Prepared Statement of Hon. Mike Lee, Chairman, Joint Economic Committee
    Good afternoon, and thank you for joining us for this hearing of 
the Joint Economic Committee.
    Over the past few months, following the spread of the novel 
coronavirus, millions of Americans have been robbed of health, 
financial security, the certainty and normalcy of daily life, and even 
of community and connection.
    In response, our nation has come together, as we always have--
through government, of course, and also through the courage and 
compassion of our voluntary civil society.
    Nonprofits, churches, and other voluntary institutions have for 
centuries played a uniquely important role in American life--helping to 
provide for others' basic needs, ensuring the stability of community 
institutions, and supplying goods such as education and the arts.
    Key to this spirit is charitable giving. Without financial 
donations, these organizations cannot undertake the good works that 
they do--including providing the indirect benefits of personal 
connectedness, reciprocity, and trust that are invaluable to community 
thriving.
    Unfortunately, there have been worrisome trends in charitable 
giving over recent years.
    As JEC staff research has found, while total American charitable 
giving has increased in most years over the last half century, the 
overall percentage of Americans giving has decreased--from 66 percent 
in 2000 to 56 percent in 2014--with a particularly pronounced drop 
among lower-income Americans.
    Additionally, the share of individual giving out of total giving 
has dropped over time, decreasing from 83 percent in 1978 to 68 percent 
in 2018.
    In other words, giving is now primarily from fewer, wealthier 
people and organizations.
    Why does this matter?
    First, it denies communities the necessary, positive ``spillover'' 
effects that flow from individual contributions and widespread 
altruism.
    And second, the very causes being supported are likely to change as 
a result of these trends. While higher-income Americans tend to give to 
education and the arts, less affluent Americans tend to give towards 
service and assistance to the poor. In fact, those making $100,000 or 
less are responsible for 49% of all giving to this area of vital need.
    One unintended contributor to this trend is the Federal tax code's 
inequitable treatment of charitable giving. As a ``below-the-line'' 
deduction, only those who itemize--generally, tax filers toward the 
upper end of the income scale--can currently claim the charitable 
deduction. Lower-income families who don't itemize now receive no tax 
benefit for their charitable contributions.
    This is an unintended consequence of the longstanding, bipartisan 
effort to raise the standard deduction, which provides tax relief to 
lower- and middle-income filers. But it's an inequity just the same, 
and an injustice to working families and the local charities who rely 
on them.
    While the CARES Act, passed earlier this year, did add an above-
the-line deduction of $300 for non-itemizers, much more could and--I 
believe--should be done. I called this hearing to talk about how--
especially in this time of great hardship, when charitable giving is so 
essential--Congress can better address this disparity.
    In recent weeks, I have been part of a bipartisan working group to 
develop legislation reforming this inequity. I am grateful that two 
other Members of the group, Senators Lankford and Shaheen, could be 
here to talk about it today. Especially in the wake of the COVID 
emergency, leveraging charitable giving should be a top priority for 
those of us tasked with reviving our economy.
    In the coming months, those of us in the House and Senate are going 
to expend a lot of energy trying to figure out which of the Federal 
programs on which we have spent all these trillions of dollars have 
worked . . . and which haven't. It's going to be a complicated, and at 
times controversial, project for all of us.
    With the nonprofit sector, however, the vetting work has already 
been done for us. Charitable organizations only exist and attract 
donations to the extent that they are already believed to succeed. They 
can serve as the ``tip of the spear'' in our national COVID response 
and help chart the course for government-financed relief at all levels.
    Today's hearing will focus on just that, and we will hear not only 
from Senators Lankford and Shaheen, but from two additional witnesses 
with valuable perspectives on philanthropy. I look forward to hearing 
the contributions of our panelists and colleagues on this important 
topic.
    Before we proceed, let me say a few words about how the hearing has 
been modified from its usual format in light of the spread of the 
coronavirus. The hearing room has been configured to maintain the 
recommended 6-foot social distancing between Members and other 
individuals in the room necessary to operate the hearing, which we have 
kept to a minimum.
    A number of Members and witnesses have chosen to use secure video 
teleconference technology, which will allow them to participate 
remotely. For those joining remotely, once you start speaking, there 
will be a slight delay before you are displayed on screen. To minimize 
background noise, we are asking those who are using the video 
conference option to please click the mute button until it is their 
turn to ask questions.
    If there is a technology issue, we will move to the next Member 
until it is resolved.
    I would remind all Members and witnesses that the 5-minute timer 
will be used. For those joining us remotely, you will notice a screen 
labeled ``Timer'' that will show how much time is remaining.
    I now recognize Vice Chair Beyer, for opening remarks.
                               __________
Prepared Statement of Hon. Donald Beyer Jr., Vice Chair, Joint Economic 
                               Committee
    Thank you Chairman Lee. Thank you to our witnesses Dr. Osili and 
Mr. Crim for sharing your expertise and perspective with us here today. 
And thank you Senators Shaheen and Lankford for joining the Committee 
this afternoon.
    I think everyone here agrees: charities are one of our nation's 
precious resources.
    They provide invaluable services and strengthen our communities. 
Perhaps at no time in our history has this important role been so 
visible as during this global pandemic and resulting economic crisis.
    I volunteered at a food bank in my district recently--for as long 
as I was there you could not see the end of the line--and they told me 
that one of their biggest challenges is that they are no longer getting 
the extra food from restaurants because restaurants are closed so they 
are having to turn to their state and local governments to fund the 
food they need to feed all of these people who do not have any income.
    Throughout this crisis, America's charities have been frontline 
responders, providing communities that have been critically impacted 
with access to housing, emergency child care for first responders, 
support for victims of domestic abuse, counseling, and other critical 
services.
                           recent challenges
    Unfortunately, at a time when we need nonprofits more than ever and 
when more Americans are turning to them for support, they also are 
facing serious economic challenges.
    Nearly three-quarters of charities globally have seen a decline in 
donations since the crisis began--half expect to absorb a hit of 20 
percent.
    They depend on a diverse set of resources. Foundations, businesses, 
and individuals. But individual giving is key--making up nearly 70 
percent of charitable contributions.
    Since 2000, the share of households donating to nonprofits has 
fallen from two-thirds to 53 percent in 2016. That translates to 20 
million fewer households donating.
               the effect of the 2017 republican tax cuts
    Unfortunately, the 2017 Republican tax cuts, the ``Tax Cuts and 
Jobs Act'' made things worse.
    You are familiar with the broad contours of the story.
    The law nearly doubled the standard deduction to $12,000 for single 
taxpayers and for married couples filing separately, and to $24,000 for 
married couples filing jointly.
    It also capped the state and local tax deduction--SALT.
    As a result, the law dramatically reduced incentives to itemize 
deductions. And not surprisingly, the number of taxpayers who itemize 
fell precipitously.
    In 2017, before the law was enacted, 26 percent of households 
itemized.
    In 2018, after the law kicked in, the share plummeted to only 10 
percent--substantially less than half of the percentage that had filed 
the previous year. Less than half.
    For the nonprofit world--that hurts. Badly.
    Fewer itemizers means fewer givers. That result was widely 
predicted even before the law was passed.
    So it shouldn't have been a surprise to anyone that individual 
donations fell in 2018.
    Despite a strong economy, individual giving fell by more than 3 
percent, after adjusting for inflation. As a percentage of GDP, 
charitable contributions by individuals declined by 6 percent.
                    the pandemic makes things worse
    Now, with the current crisis, contributions are likely falling 
faster as charities confront both fewer donations and canceled 
fundraising events.
    This means less money will be available and spent on the necessary 
services these organizations provide to our communities.
    Already, 60 percent of charities have reduced services. A survey of 
smaller nonprofits found that 13 percent had suspended all or most of 
their operations.
                         macroeconomic effects
    There are serious economic impacts as well.
    In 2017, nonprofits employed more than 12 million people in the 
United States--more than 10 percent of the private-sector workforce.
    But as a result of the pandemic, nearly one-in-six nonprofits 
around the world were forced to furlough employees. One-in-eight have 
had to lay people off.
                            policy responses
    We all agree that these are serious problems. The question is what 
to do about it.
    We'll hear today more about proposals to incentivize additional 
charitable giving by expanding access to the charitable deduction 
beyond the $300 universal deduction for this year included in the CARES 
Act. Expanding the deduction further could help offset lost individual 
contributions resulting from the TCJA.
    I favor taking a broad look at a range of options available to 
bolster the sector.
    Supporting charities and the individuals who count on them for 
critical services and jobs requires a comprehensive approach that 
includes ensuring organizations can access the many supports in CARES 
and other coronavirus relief legislation.
    Congress intentionally made PPP loans available to nonprofits and 
many have been able to utilize them to retain employees and sustain 
operations.
    Nonprofits are also benefiting from the Employee Retention Tax 
Credit in the CARES Act. The HEROES Act would increase the tax credit 
from 50 percent to 80 percent of qualifying wages and lift the wage 
cap.
                     beyer charitable rollover bill
    Another path is to tap the generosity of our senior citizens. I've 
introduced a bill that would incent charitable giving by expanding the 
IRA Charitable Rollover to allow people starting at age 65 to make tax-
free IRA rollovers to charities while providing a guaranteed income for 
the senior citizen.
    I know Senator Klobuchar has introduced legislation to provide 
grants that would help nonprofits retain employees or hire those who 
have recently become unemployed.
                       we need a sense of urgency
    There are lots of smart ways to address these challenges.
    What nonprofits need most is an injection of resources to get them 
through this period. And they need it now.
    Some in Congress feel no sense of urgency. But I hear every day 
from people in my district, from nonprofits, big and small, that a 
sense of urgency is exactly what's needed.
    Thank you Chairman Lee for focusing attention on what we can do 
right now to support charities and to help them weather this storm.
    And again I'd like to thank our witnesses from inside and outside 
Congress for sharing your perspectives today.
                               __________
              Prepared Statement of Senator James Lankford
    Chairman Lee, Vice Chair Beyer, Members of the Committee--I want to 
thank you for holding this critically important hearing on ways we can 
boost charitable giving during the middle of the COVID-19 pandemic. 
This is an incredibly challenging time for individuals and families all 
across our nation, and supporting members of our nonprofit community 
will be essential to a speedy and full recovery.
    Our churches, charities, and other nonprofits form a major pillar 
in each of our communities. They help support our neighbors in need, 
and lend a helping hand to those who are struggling. They provide a 
vital access point to so many, whether it be a meal at your local soup 
kitchen, groceries and supplies from a city food bank, or a warm coat 
at a Main Street Goodwill. Housing/shelter, pro bono health care 
services, job skills training . . . you name it. Our nonprofits deliver 
an almost immeasurable range of services, and meet the needs of our 
nation's most vulnerable every single day. It's this quiet dedication 
and steadfast commitment to serving our neighbors and families in need 
that weaves our safety net together. The safety net protects lives and 
livelihoods, and works to prevent our struggling neighbors from 
slipping through the cracks of society, while preserving human dignity 
and worth.
    Many of us have worked on the issue of charitable giving for a long 
time. We've examined various ways to boost giving through the tax code, 
and we've tried to remove regulatory burdens where we find them that 
prevent our churches and charities from fulfilling their missions.
    For years, many of our nonprofits have struggled to meet the needs 
of their neighbors, and, unfortunately, the COVID-19 pandemic has only 
exacerbated the situation further. With millions having lost their jobs 
and livelihoods over the past weeks and months, we've heard from 
thousands of nonprofits who have been hit exceptionally hard by the dip 
in giving and fundraising. In many cases, they've been unable to make 
their payrolls and make payments on their fixed monthly costs. 
Initiatives like the Paycheck Protection Program were helpful, but we 
can do more.
    We must find creative ways to incentivize those who have the heart 
and means to give, to give. Our country's nonprofits need their support 
now more than ever.
    That's why I've been working with five of my colleagues in the 
Senate--including you Mr. Chairman--on a bipartisan way to boost giving 
through the tax code. As most folks watching this hearing know, the 
CARES Act included a new $300 above-the-line deduction that taxpayers 
can claim for 2020 in addition to taking the standard deduction. 
Although I advocated for a significantly higher amount--given the 
financial pressures COVID has placed on our nonprofits--it was a 
welcome policy addition, and I appreciated its inclusion. However, we 
must go bigger if we are going to match the size of the need COVID has 
brought upon us. If we don't, we risk creating a massive void in our 
social safety net, meaning our most vulnerable will have critical needs 
unmet during one of the most painful times in our nation's history. The 
beauty and importance of what our churches and charities bring to 
communities is underscored by the fact that they are not of the Federal 
or state government, and thus they are not propped up by taxpayer 
dollars. Rather, they are funded by the kindness and generosity of our 
fellow citizens.
    The approach we're offering is simple--let's build on the current 
$300 deduction for cash gifts included in CARES, and increase the limit 
to one-third of the standard deduction (that's $4,000 for individuals 
or $8,000 for married filers). Let's also make it applicable to the 
2019 tax year as well, so that those who gave last year can go back and 
amend their 2019 returns to also take advantage. That was an idea from 
my good friend and fellow panelist, Senator Shaheen, and one that we've 
worked to include in the updated version.
    This is a straightforward way to incentivize giving for taxpayers 
who take the standard deduction. This would really help our middle- to 
low-income taxpayers who want to give. This policy rewards that 
generosity which ultimately benefits our churches and charities who 
turn those gifts into met needs.
    The challenge is clear--we need to support our nonprofits by 
boosting giving. This is a great way to do that, and one that has 
strong bipartisan support here in Congress. Moreover, we have 
overwhelming support in the nonprofit community. We had over 6,000 
nonprofits of all sizes and missions that became a part of our support 
coalition during the debate on CARES, and they continue to help us 
build momentum.
    I want to give a special thanks to some of my colleagues who have 
been real leaders in continuing to push this forward--Senators Shaheen, 
Coons, Scott, Klobuchar, and certainly Chairman Lee. I'd also like to 
thank our House-side partner, Congressman Walker, for his leadership 
across the Capitol. We've worked on this issue together since 2017, and 
the nonprofit sector has no better advocate in the House.
    I sincerely thank the Committee for holding this important hearing, 
and for allowing me the opportunity to speak. I look forward to working 
with each of you to further enact policies that will lift up our 
nation's nonprofits at a time when they are needed more than ever.
    Thank you, Mr. Chairman.
                               __________
              Prepared Statement of Senator Jeanne Shaheen
    Chairman Lee, Vice Chairman Beyer, thank you for the opportunity to 
share a few thoughts with you today on this very important subject.
    New Hampshire has a historically dynamic and robust nonprofit 
community, and charitable organizations provide critical services 
throughout the Granite State.
    From food banks to homeless shelters, arts organizations and faith-
based groups, these entities are part of the fabric of our society in 
New Hampshire and around the country.
    Particularly in New Hampshire, nonprofit organizations form part of 
our social safety net to protect and support our citizens and 
communities. For example:

      Area Agencies in New Hampshire provide programs for 
people with developmental disabilities and their families.
      The New Hampshire Coalition against Domestic and Sexual 
Violence, and the state's 13 crisis centers, provide critical services 
for survivors of domestic and sexual violence.
      And New Horizons helps homeless individuals and families 
reach beyond the cycle of homelessness to lead healthy and successful 
lives.

    I have had multiple calls with these and other nonprofit groups in 
my state to hear about the important work they are doing right now to 
help lessen the impact of this pandemic.
    However, many organizations in New Hampshire and around the country 
are now struggling to fundraise due to their inability to conduct in-
person events, as well as the economic strain so many families are 
experiencing.
    According to a recent pulse survey conducted by the New Hampshire 
Center for Nonprofits, 92 percent of responding nonprofits have 
reported a drop in revenue by an average of 34 percent, while 45 
percent of respondents have instituted layoffs.
    At the same time, according to the same survey, 38 percent of 
organizations, including 45 percent of human service organizations 
reported an increase in demand for their services, and 44 percent of 
all respondents have increased some operations to meet this surge in 
demand.
    Now more than ever, we should be doing everything we can to support 
these organizations, and providing an incentive through the tax code is 
a simple way for Congress to stand side-by-side with our nonprofits and 
charitable organizations and faith-based groups during this challenging 
time.
    I'm very pleased to be working with a bipartisan group of Senators, 
including Chairman Lee and Senator Lankford, as well as others, to 
design a tax incentive that would allow a taxpayer to claim an above-
the-line deduction equal to up to 1/3 of the standard deduction, or 
$8,000 for a married couple filing jointly, for charitable 
contributions made in tax year 2020.
    In addition, this legislation would include my proposal to allow a 
deduction for charitable contributions made before the new tax filing 
deadline of July 15, 2020, to be ``carried back'' to tax year 2019, 
either through a current filing or, for those who have already filed 
their 2019 returns, through an amended return.
    Thank you again, Mr. Chairman, for inviting me to discuss the 
legislation and I appreciate your partnership as we work to get this 
bill across the threshold. As we all know, Congress must act now 
because the need is great and the challenges that nonprofit and 
charitable organizations are working to address are so acute.
                               __________
Prepared Statement of Bill Crim, President and CEO, United Way of Salt 
                                  Lake
    Chairman Lee, Vice Chairman Beyer, Members of the Committee,
    I deeply appreciate the opportunity to come before the committee to 
talk about United Way of Salt Lake's work, our response to the COVID-19 
crisis, and the role tax policy plays in driving private giving.
    United Way of Salt Lake builds cross-sector partnerships that work 
to solve our community's most complex social and economic problems. 
Within these partnerships we hold ourselves accountable to results that 
no single organization--or sector--can achieve alone. Together with 
thousands of individual donors and volunteers--and with hundreds of 
private, public, and social sector partners, we are working to make 
sure that every child in our community has the opportunity to succeed 
in school and in life. We do this by improving and expanding early 
learning opportunities, strengthening literacy and math skills, and 
supporting high school graduation and completion from postsecondary 
education. Through 2-1-1 and our partnerships focused on the social 
determinants of health, we are working to improve health outcomes by 
changing the ways health systems interact with community-based 
organizations and improving the ways that economically vulnerable 
Utahns connect to the more than 10,000 services available in the 
charitable and public sectors in Utah.
    Our commitment to create lasting change and help all kids and 
families succeed, regardless of their circumstances, holds especially 
true during this time. As we continue to address the health and 
economic impacts of the COVID-19 pandemic, and as we are all called to 
address the urgent need for racial justice in our country, we know that 
the role of nonprofits, and of charitable giving, is critical.
    Over the past three months, hundreds of individual Utahns have 
generously risen to the challenge of supporting our community. In 
addition, key business partners like Goldman Sachs, Mark Miller, Zions 
Bank, and Savage have contributed to our work. This generosity has 
allowed us to respond to dramatic increases in contacts through 2-1-1, 
to provide critical support to dozens of community partners meeting 
essential basic needs, and to develop a comprehensive initiative to 
address the dramatic learning loss experienced by so many students over 
the past three months.
    I am proud to be talking to you today from Utah, the most 
charitable state in the United States--which is the most charitable 
country in the world.
    Reasons for giving are highly personal--but I can assure you from 
firsthand experience that people give to charities for altruistic 
reasons. Sometimes this selfless concern for others is driven by faith 
or simply a desire to give back to the community in which they live. 
Often, and in our case, it is because people believe that by working 
together we can solve society's most complex problems.
    But tax policy does influence people's behavior, from business 
investment decisions to buying a home. This doesn't mean every person 
is influenced by tax policy, but large numbers of people are.
    Charitable giving is the most discretionary financial decision 
someone can make. Good tax policy might be the nudge that someone needs 
to make their first donation. Or it may prompt a long-time donor to 
give a little more.
    Consider, for example, a person who gives $500 per year to 
charities. If they paid a 20% tax rate, that means they are paying $100 
in taxes on that money they are giving away. Setting aside the 
fundamental unfairness of taxing income that's being donated to help 
others, those taxes may prompt a smaller donation from some people who 
aren't in a position to give any more.
    Conversely, if Congress were to relieve tens of millions of 
Americans from taxes on income they donate, it's not hard to imagine 
the positive impact on charitable giving.
    I am not an economist or tax policy expert, but studies have 
consistently found that good tax policy will drive more giving, that 
includes increased giving by people who make small donations.
    United Ways, basic needs charities, faith-based charities, and 
disaster relief charities rely heavily on small donations from large 
numbers of people. We raise about $15 million per year in Salt Lake 
City. But our average individual donation is $229 per year. Those small 
donations add up. Nationally, United Ways raise over $1 billion per 
year from small donors who give on average $155 per year. (Note our 
donor base is diverse, and we raise several billion more from corporate 
partners and large donors.)
    Of course, in my view the ideal Federal tax policy would be to 
permanently relieve all taxpayers from paying taxes on income they 
donate to charity. That could happen through an above the line 
exclusion or a non-itemizer charitable deduction combined with the 
existing deduction. Bills by Congressman Danny Davis (D-IL) or 
Congressmen Chris Smith (R-NJ) and Henry Cuellar (D-TX) would do that.
    We understand that that may not be viable at this moment in time. 
But a temporary non-itemizer deduction could be instrumental in helping 
charities help our communities and those impacted by crises facing our 
country.
    We understand Chairman Lee, Senator Klobuchar, and others are 
supporting a temporary deduction modeled after Senator Lankford's and 
Congressman Mark Walker's legislation. We think that legislation would 
provide a much needed infusion of donations directly to the charities 
that are leading the COVID-19 response and recovery efforts. The 
recovery efforts by charities will go well beyond 2020, so the longer 
this legislation is in effect, the better it will help us support our 
communities and those who have been affected by COVID-19.
    As I close, I want to note that several Members of this Committee 
have supported and personally donated to their United Way (in at least 
one case for decades) and others have played significant roles in 
raising donations for their local United Ways. On behalf of United Way, 
I want to extend our deepest thanks to each of you.
    Mr. Chairman, I'm happy to answer any questions.
                               __________
 Prepared Statement of Dr. Una Osili, Associate Dean for Research and 
International Programs at the Indiana University Lilly Family School of 
                              Philanthropy
    Chairman Lee, Vice Chair Beyer, and other distinguished Members of 
the Joint Economic Committee.
    Thank you for the opportunity to testify today. I am the Associate 
Dean for Research and International Programs at the Indiana University 
Lilly Family School of Philanthropy--the world's first School dedicated 
to the study and teaching of philanthropy. The School is in the 
vanguard of philanthropy education, and research. I am also a Professor 
of Economics and Philanthropic Studies.
    The School's research initiatives have tracked crisis and disaster 
giving since September 11, 2001.
    My written testimony will focus on addressing three crucial 
questions: 1) What are the current trends in charitable giving during 
the COVID-19 pandemic 2) How should these trends be interpreted in 
light of overall charitable giving patterns? 3) What are the policies 
that can strengthen charitable giving by American households now and in 
the future?
             charitable giving during the covid-19 pandemic
    For many American households, philanthropy is a core value.
    Through good times, and during times of crisis and upheaval, 
American philanthropy--which includes donors at all income levels and 
all racial and ethnic backgrounds--has worked collaboratively to fill 
gaps where governments or markets face limitations and provide capital 
for innovation, and to meet basic needs.
    Philanthropy defined ``as voluntary action for the public good'' is 
a central way for Americans to contribute to civic and social life and 
the vitality and strength of their communities. The philanthropic 
sector role is evident in short-term emergencies as well as in 
Americans' long-term commitment to religious congregations, food 
pantries, homeless shelters, neighborhood associations, to the arts, 
and to educational programs.
    In 2018, Americans donated about $427.71 billion to charitable 
organizations [1], of which about 68 percent came from living 
individuals.
    The COVID-19 pandemic has induced twin crises in communities across 
the U.S. Americans of all backgrounds are grappling with unprecedented 
health and economic shocks. Moreover, African-American and Latino 
populations have been disproportionately impacted by the COVID-19 
pandemic, exposing deep racial and structural inequities [2].
    Four aspects of the philanthropic response to the COVID-19 pandemic 
merit close attention.
    First, we have witnessed tremendous generosity during the COVID-19 
pandemic by American households of all backgrounds, not only the 
immediate and generous monetary support to charitable organizations, 
but also ``mutual aid'' to neighbors, friends, and community members. 
To date, U.S. foundations and corporations have contributed over $11 
billion to the novel coronavirus response, based on Candid's estimates 
[3].
    Research can provide critical insights for donor patterns and 
better understand what we might be in store so we can strengthen 
services and support recovery efforts ahead. Philanthropy has played an 
important role during and following national and international crises. 
From 9/11 to the disasters, such as Hurricane Harvey in 2017, we have 
seen Americans of all ages, education, and income levels give 
generously of their money, their goods, their time, and their talent, 
as well as build networks during times of crisis.
    In response to such crises, around 30 percent of U.S. households 
made a disaster-related donation in 2017 and 2018, and the average 
donation was about $300 [4]. The magnitude of a disaster was found in 
our research to be the top factor encouraging Americans to contribute 
to disaster aid efforts. Many Americans who donated after disasters did 
so without reducing their giving to other charitable causes. Nearly 80 
percent of households who donated to disaster-related activities in 
2017 and 2018 did not change their giving to other causes, and 12 
percent even increased their giving to other causes.
    During the COVID-19 pandemic, philanthropy has continued to play a 
critical role in addressing the immediate health impacts while 
addressing the cascading effects of the crisis.
    For 20 years, the School has tracked gifts of $1 million or more in 
the United States through the Million Dollar List. In response to 
COVID-19, there have been a significant number of contributions of $1 
million or more made by individuals, including many donations by 
celebrities and other wealthy individuals who have not previously 
donated at the million-dollar level. To date, the largest publicly 
announced donation is a pledge by Jack Dorsey, the CEO of Twitter and 
Square, Inc. [5].
    Initial evidence suggests that large gifts are fueling scientific 
advances and serving as a catalyst for research in new areas in health, 
and expanding health care capacity. Specifically, philanthropic support 
has played a role in catalyzing innovation in developing health care 
capacity, diagnostic testing, and funding vaccine research.
    Second, during the crisis, new forms of philanthropy--such as 
crowdfunding--have gained visibility. The crisis has inspired 
innovation with the adoption of new fundraising and virtual engagement 
technologies and demonstrating the role of individual donors in meeting 
community challenges.
    Crowdfunding campaigns, typically driven by small donations, have 
expanded in their reach and impact. There are nearly 200 crowdfunding 
campaigns in the United States on GoFundMe.com that have each raised 
over $100,000. The largest--America's Food Fund--has raised over $26 
million and focuses on addressing food insecurity during the pandemic.
    Another significant crowdfunding campaign launched by the Center 
for Disease Control (CDC) Foundation on Charidy.com has raised nearly 
$50 million.
    Numerous national and global fundraising campaigns have taken place 
since the beginning of the pandemic. One of the largest, One World: 
Together at Home, which took place on April 18, raised nearly $128 
million [6], while over $503 million was donated online during 
#GivingTuesdayNow on May 5 [7].
    Third, in the wake of the COVID-19 pandemic, we have also seen 
philanthropy as a unique collaborator, convener, and facilitator of 
collective action in local communities.
    A unique initiative led by Dr. Laurie Paarlberg, Endowed Chair in 
Community Philanthropy at the Lilly Family School of Philanthropy, is 
tracking philanthropy's response at the local level.
    As of May 15, her Mapping Community Philanthropic Response to 
COVID-19 project estimates that community funds in cities and towns 
across America have raised more than $634 million and distributed at 
least $376 million\1\ to financially vulnerable individuals and 
nonprofits. As of May 15, the research team had identified 1020 
organizations supporting COVID-19 funds, with 244 funds jointly 
supported by United Way or community foundation. Many of these funds 
have worked to address the critical needs created by the pandemic--
including food insecurity, mental health, and emergency financial 
assistance.
---------------------------------------------------------------------------
    \1\ Both numbers are an estimate and underreport the magnitude of 
community philanthropy as only 60% of funds are currently publicly 
reporting resource flows.
---------------------------------------------------------------------------
    Finally, the COVID-19 pandemic has exposed harsh social and 
economic disparities. Private funders and nonprofits are working to 
address the needs of the most vulnerable who are most impacted by the 
pandemic's economic fallout.
    In Michigan, a collaboration of philanthropic organizations 
(including the Kellogg Foundation) rapidly joined forces to supply 
computer tablets with high-speed internet connectivity to Detroit 
Public School students [8]. The $23 million fund, called Connected 
Futures, addresses the digital divide for K-12 students. A national 
fund, the Coronavirus Care Fund (CCF), provides emergency assistance 
for qualifying domestic workers who are facing hardship, and over 
100,000 people around the country have contributed to the fund [9]. 
Another national fund, the Families and Workers Fund, focuses on 
workers and families who have been affected by job loss and school 
shutdowns [10].
    The initial philanthropic response to COVID-19 is unprecedented in 
its speed, size, and scope--and many local food banks and human service 
charities and nonprofits of all sizes have risen to the challenge.
    Not all communities have a sustained capacity to raise much-needed 
funds and respond to local needs. However, the economic and social 
ripple effects of the pandemic are still unfolding. The need for 
private philanthropy is rising, with many more people and communities 
needing services and support when the ability of some donors to give is 
challenged.
                  overall trends in charitable giving
    Research has long established that charitable giving is linked with 
national and regional economic trends. Several factors influence how 
much Americans donate, including financial and economic conditions.
    Before the Great Recession, the fraction of Americans who gave to 
charitable causes was stable at about two-thirds of the population. In 
2016 (the most recent year with available data), around 53 percent of 
American households donated [11]. In general, donation participation 
and amounts donated increase with education, wealth, and income [12-
14].
    The Philanthropy Panel Study [15], a module of the Panel Study of 
Income Dynamics [16], has tracked the share of American households who 
donate to charity since 2000. Between 2000 and 2008, giving remained 
steady (66.2 percent donated in 2000 and 65.4 donated in 2008). The 
Great Recession (December 2007-June 2009) [17], in particular, exposed 
how vulnerable household giving is to economic downturns. At the same 
time, components of 21st-century life such as globalization, 
demographic shifts, decreasing congregational affiliation and 
attendance, and increasing use of technology continue to alter and 
reshape future giving patterns.
    In 2016, the average American donor contributed $2,763, or about 
3.7 percent of income [11]. Participation rates and giving levels among 
individuals with high education, wealth, and income have generally held 
steady or increased [11]. However, among low- and middle-income 
Americans, and Americans with less than a high school education 
declines in participation rates in charitable giving are evident [11; 
18] For now, this trend of ``dollars up, donors down'' has allowed 
overall giving in the United States to continue to increase in most 
years [1].
    Today, low- and middle-income households represent a smaller share 
of America's individual giving landscape with implications for the 
strength and vibrancy of civil society.
                    tax policy and charitable giving
    Beyond the impact of financial and economic conditions, one 
important aspect of the giving landscape is the potential tax benefit 
that U.S. households receive from their charitable contributions. Tax 
policy can promote the growth of philanthropy and the development of a 
thriving nonprofit sector.
    The charitable deduction is one of the oldest tenets of the U.S. 
tax code, dating to 1917. It effectively reduces the cost contributing 
to qualified nonprofit organizations by an amount that depends on the 
donor's marginal tax rate, subject to specific annual limits. It 
affirms the value our society places on voluntary giving and the vital 
role of philanthropic organizations in meeting individual and community 
needs, and encourages the spirit of generosity that is an integral 
component of American civic life.
    Over time, U.S. Federal tax policy has become less progressive. It 
lowered the tax burden on high-income households without providing the 
same incentives for low- and middle-income households [19]. This has 
the potential to reduce giving further by low- and middle-income 
families.
    When examining the impact of tax policies, policymakers have the 
opportunity to consider how various policy options influence the level 
of charitable giving dollars, the share of households that donate, and 
the overall impact on tax revenues.
    The Lilly Family School of Philanthropy recently analyzed the 
impact of various policy options that would extend the non-itemizer 
deduction. Expanding the non-itemizer deduction is estimated to 
increase both participation rates in charitable giving and charitable 
dollars raised. We projected that extending the non-itemizer deduction 
could increase charitable giving dollars by up to $26.2 billion (an 
increase of 7.7 percent), and increase the number of households who 
donate by up to 7.3 million households (an increase of 8.2 percent) in 
2021 [20]. The policy would reduce Treasury revenue by up to $21.6 
billion (a decrease of 0.6 percent). Therefore, the plan would bring in 
up to $4.6 billion more in charitable dollars than is lost in Treasury 
revenue.
    As the nation faces daunting and complex challenges, policy debates 
have increasingly focused on strengthening the incentives for 
charitable giving.
    The importance of public policy that can support charitable giving 
is critical. To meet the complex challenges of expanding community 
needs triggered by COVID-19, we need to examine how individuals and 
organizations across public, business, and nonprofit sectors can work 
together effectively to address immediate and long-term challenges.
    Expanding tax incentives for lower- and middle-income Americans can 
be one vital step in fostering public involvement in this critical 
effort.
    Thank you for the opportunity to testify today. I would be happy to 
respond to any questions you may have.
References:
        1. Giving USA Foundation. (2019). Giving USA: The Annual Report 
        on Philanthropy for the year 2018. Retrieved from Chicago:
        2. Noppert, G. A. (2020, April 9). COVID-19 is hitting black 
        and poor communities the hardest, underscoring fault lines in 
        access and care for those on the margins. The Conversation. 
        Retrieved from https://theconversation.com/covid-19-is-hitting-
        black-and-poor-communities- the-hardest-underscoring-fault-
        lines-in-access-and-care-for-those-on-margins-135615
        3. Candid. (2020). Funding for coronavirus (COVID-19): Funding 
        summary. Retrieved from https://candid.org/explore-issues/
        coronavirus
        4. Indiana University Lilly Family School of Philanthropy, 
        Candid, & Center for Disaster Philanthropy. (2019). U.S. 
        Household Disaster Giving In 2017 and 2018. Retrieved from 
        http://hdl.handle.net/1805/19403
        5. Dorsey, J. (2020). #startsmall tracker. Retrieved from 
        https://docs.google.com/spreadsheets/d/1-
        eGxq2mMoEGwgSpNVL5j2sa6ToojZUZ- Zun8h2oBAR4/htmlview
        6. Global Citizen. (2020). `One World: Together At Home' raised 
        almost $128 million in response to the COVID-19 crisis. Imact: 
        Health. Retrieved from https://www.globalcitizen.org/en/
        content/one-world-together-at-home-impact/
        7. Haynes, E. (2020, May 28). Donors gave $503 million online 
        on GivingTuesdayNow, early tally shows. The Chronicle of 
        Philanthropy. Retrieved from https://www.philanthropy.com/
        article/Donors-Gave-503- Million/248881?utm--source=pt&utm--
        medium=en&utm--source=Iterable&utm--medium=em ail&utm--
        campaign=campaign--1253401&cid=pt&source=ams&sourceId=5171120
        8. Ridella, A. (2020). Educating the youth: Investing $23 
        million in Detroit Public Schools. Retrieved from https://
        empoweringmichigan.com/educating-the-youth-investing-23-
        million- in-detroit-public-schools/
        9. National Domestic Workers Alliance. (2020). Support for 
        Workers: Coronavirus Care Fund. Retrieved from https://
        domesticworkers.org/coronavirus-care-fund
        10. Candid. (2020). Foundations launch COVID-19 fund for low-
        wage workers. Philanthropy News Digest. Retrieved from http://
        philanthropynewsdigest.org/news/foundations-launch- covid-19-
        fund-for-low-wage-workers
        11. Clark, C., Han, X., & Osili, U. (2019). Changes to the 
        Giving Landscape. Retrieved from https://generosityforlife.org/
        wp-content/uploads/2019/10/Changes-to-the-Giving- Landscape--
        Vanguard-Charitable--2019-FINAL.pdf
        12. Bekkers, R., & Wiepking, P. (2011). Who gives? A literature 
        review of predictors of charitable giving part one: religion, 
        education, age and socialisation. Voluntary Sector Review, 
        2(3), 337-365.
        13. Wiepking, P., & Bekkers, R. (2012). Who gives? A literature 
        review of predictors of charitable giving. Part Two: Gender, 
        family composition and income. Voluntary Sector Review, 3(2), 
        217-245.
        14. Wilhelm, M. O. (2006). New data on charitable giving in the 
        PSID. Economics Letters, 92(1), 26-31.
        15. Philanthropy Panel Study [public use data]. (2019).
        16. Panel Study of Income Dynamics [public use data]. (2019).
        17. The National Bureau of Economic Research. (2010). U.S. 
        Business Cycle Expansions and Contractions. Retrieved from 
        https://www.nber.org/cycles/
        18. Indiana University Lilly Family School of Philanthropy. 
        (2019). 16 Years of Charitable Giving Research. Retrieved from 
        https://generosityforlife.org/wp- content/uploads/2019/12/PPS-
        Report-FINAL.pdf
        19. Piketty, T. (2014). Capital in the twenty-first century: 
        Harvard University Press.
        20. Indiana University Lilly Family School of Philanthropy. 
        (2019). Charitable giving and tax incentives: Estimating 
        changes in charitable dollars and number of donors resulting 
        from five policy proposals. Retrieved from http://
        hdl.handle.net/1805/19515
                               __________
Response from Mr. Crim to Question for the Record Submitted by Senator 
                               Klobuchar
    The nonprofit sector employs one out of every three Americans, and 
over 44 million Americans have lost their jobs since mid-March. An 
infusion of Federal funding could help nonprofits keep their doors 
open, scale their services, and provide opportunities for the newly 
unemployed to return to work. I have introduced legislation to create a 
major new grants program to help nonprofits meet needs that have 
increased during the pandemic to retain their employees and hire new 
ones.

      How can connecting newly unemployed workers with 
nonprofits who need new employees reduce poverty and help promote 
economic recovery?

    According to the Bureau of Labor Statistics, nonprofits in the U.S. 
employ more than 12 million people (2017). Helping nonprofits retain 
and hire employees during this pandemic is both a critical strategy for 
promoting economic recovery--and is especially strategic in terms of 
addressing the disproportional impact of the pandemic on Americans 
living in poverty.
    Nonprofits are on the front lines of our country's pandemic 
response--providing support for basic needs like food and housing, 
mobilizing volunteers, and supporting low-income students as schools 
wrestle with the challenge of educating children in this environment.
    In Utah, we've seen a steep increase in needs, while at the same 
time many nonprofits are fighting to survive. According to a survey 
conducted by the Utah Nonprofits Association ``nonprofits in Utah 
report layoffs, lost revenue, canceled events, and curtailed services 
in response to the COVID-19 pandemic. Reduced revenue from events, 
combined with decreases in donations and the need for social distancing 
have led 24% of nonprofits surveyed by UNA to temporarily suspend 
services--creating gaps in the social fabric as the neediest among 
society lose access to housing, food, and family support.
    Nearly two thirds (61%) of nonprofits told UNA that in response to 
social distancing, they had slowed, temporarily suspended, or decreased 
services--even as the demand for their services increased. Fifty-two 
nonprofits in Utah have canceled 1,493 events--eliminating $11,795,501 
in revenue. Another $4,091,941 was spent to restructure events and move 
them online. In a March UNA survey of nonprofits, 68% of respondents 
believed that the COVID-19 would negatively impact finances. It is 
clear from these numbers, that these predictions were accurate. The 
decline in financial security may also be more rapid than anticipated. 
In the March survey, 41% of nonprofits reported cash reserves equal to 
or greater than six months of expenses. Six weeks later, only 32% of 
those surveyed reported that same level of financial security.
    Nonprofits have responded to the increased financial pressure by 
seeking new sources of funding and looking for partnerships with 
businesses and other nonprofits. Over half (52%) of nonprofits have 
identified new revenue streams--but only 32% have actually secured new 
funding.
    Nonprofit sector job losses in response to the pandemic are 
sobering. In the UNA survey, 14 employers reported laying off 102 full-
time employees and 185 part-time staff members. Layoffs will continue; 
those surveyed anticipated furloughing another 18 full-time staff 
members and 68 part-time employees. According to the U.S. Bureau of 
Labor and Statistics, nonprofits employ 6.7% (78,235) of Utah's 
workforce. Applying these numbers to Utah's over 10,000 nonprofit 
organizations indicate that the organizations who serve our most needy 
are, or could be in need themselves.''
    Nationally, the picture is similar. The National Council of 
Nonprofits estimates that ``1.6 million nonprofit jobs have been lost 
through June (data source, page 14 [Johns Hopkins Center for Civil 
Society Studies 2020 Nonprofit Employment Report]). It will take 
several years to determine how many nonprofits have folded, and 
nonprofits are in grave danger of having their budgets impacted now 
more than ever. Beyond the initial wave from COVID-19, we are bracing 
for another financial challenge as state budgets shift as they 
individually respond to this economic crisis. Nonprofits receive a 
third of their revenue from states and should that revenue stream 
constrict, nonprofits will be left without critical resources to do 
their work.''
    Beyond addressing emergency needs, nonprofits in many communities 
are leading the dialogue around building an inclusive and more 
equitable recovery. It is in these community conversations where 
Americans from all parties and all sectors can come together and really 
solve problems. For one of the best descriptions of how this occurs, 
please see the following article by David Brooks.
    In summary--nonprofits in Utah, and throughout the country are 
playing a critical role in helping our Nation respond to the pandemic 
and create a more equitable and inclusive future--in both cases 
strengthening and building the social capital in communities to heal 
and be more resilient in times of crisis. The legislation introduced by 
Senator Klobuchar would be a powerful and in many places necessary tool 
for continuing this work. In addition to the essential resources 
provided, it would be helpful in the long-term to build in more robust 
and efficient data reporting for the nonprofit sector (currently The 
Johns Hopkins Center for Civil Society Studies independently gathers 
nonprofit employment data. As the third largest employer in the United 
States, it would be ideal to streamline the collection and reporting of 
nonprofit job-related data at the Federal level).
Opinion A Really Good Thing Happening in America--The New York Times
    Sunday, December 16, 2018
    2:57 PM
    Clipped from: https://www.nytimes.com/2018/10/08/opinion/
collective-impact-community-civic-architecture.html
    A strategy for community problem-solving does an extraordinary job 
at restoring our social fabric.
    Not long ago, in Spartanburg, S.C., I visited the offices of 
something called the Spartanburg Academic Movement (SAM). The walls 
were lined with charts measuring things like kindergarten readiness, 
third-grade reading scores and postsecondary enrollment.
    Around the table was just about anybody in town who might touch a 
child's life. There were school superintendents and principals, but 
there were also the heads of the Chamber of Commerce and the local 
United Way, the police chief, a former mayor and the newspaper editor.
    The people at SAM track everything they can measure about 
Spartanburg's young people from cradle to career. They gather everybody 
who might have any influence upon this data--parents, religious 
leaders, doctors, nutrition experts, etc.
    And then together, as a communitywide system, they ask questions: 
Where are children falling off track? Why? What assets do we have in 
our system that can be applied to this problem? How can we work 
together to apply those assets?
    There are a lot of things I love about this approach.
    First, it understands that life is longitudinal. Sometimes social 
policies are distorted by the tyranny of randomized controlled 
experiments. Everybody is looking for the one magic intervention that 
will have a measurable effect.
    But life isn't like that. Our actual lives are influenced by 
millions of events that interact in mysterious ways. And when life is 
going well it's because dozens of influences are flowing together and 
reinforcing one another. SAM tries to harness those dozens of 
influences.
    Second, SAM treats the whole person. ``The disease of modern 
character is specialization,'' Wendell Berry once wrote. Sometimes 
schools treat students as brains on a stick who come to be filled with 
skills and information.
    But children don't leave behind their emotions, their diet, their 
traumas, their safety fears, their dental problems and so on when they 
get to school. If you're going to help kids, you have to help the whole 
kid all at once.
    Third, and maybe most important, SAM embodies a new civic 
architecture, which has become known as the ``collective impact'' 
approach. Americans feel alienated from and distrustful toward most 
structures of authority these days, but this is one they can have faith 
in.
    SAM organizes the community of Spartanburg around a common project. 
Then it creates an informal authority structure that transcends public-
sector/private-sector lines, that rallies cops and churches, the grass 
roots and the grass tops. Members put data in the center and use it as 
a tool not for competition but for collaboration. Like the best social 
service organizations, it is high on empathy and high on engineering. 
It is local, participatory and comprehensive.
    SAM is not a lone case. Spartanburg is one of 70 communities around 
the country that use what is called the StriveTogether method. 
StriveTogether began in Cincinnati just over a decade ago. A few 
leaders were trying to improve education in the city and thinking of 
starting another program. But a Procter & Gamble executive observed, 
``We're program-rich, but system-poor.'' In other words, Cincinnati had 
plenty of programs. What it lacked was an effective system to 
coordinate them.
    A methodology was born: organize around the data, focus on the 
assets of the community, not the deficits; realize there is no one 
silver-bullet solution; create a ``backbone organization'' (like SAM) 
that can bring all the players together; coordinate decision-making and 
action; share accountability.
    At one point the folks in Cincinnati noticed that their students 
were not coming prepared for kindergarten. The data suggested that the 
private pre-K programs were performing better than the public ones. So 
the public school system allocated some of its money to support other, 
private programs, making Cincinnati one of the first American cities to 
offer near-universal preschool. That's a community working as one.
    Collective impact structures got their name in 2011, when John 
Kania and Mark Kramer wrote an influential essay for the Stanford 
Social Innovation Review in which they cited StriveTogether and 
provided the philosophical and theoretical basis for this kind of 
approach.
    Such structures are now being used to address homelessness, hunger, 
river cleanup and many other social ills. Collective impact approaches 
have had their critics over the years, in part for putting too much 
emphasis on local elites and not enough on regular parents (which is 
fair).
    But a recent study led by Sarah Stachowiak and Jewlya Lynn of 25 
collective impact initiatives found that these approaches do work, at 
least most of the time. StriveTogether, which is now led by Jennifer 
Blatz, is thriving. It's just received a significant financial infusion 
from Connie and Steve Ballmer, of the Ballmer Group.
    Frankly, I don't need studies about outcomes to believe that these 
collective impact approaches are exciting and potentially 
revolutionary. Trust is built and the social fabric is repaired when 
people form local relationships around shared tasks.
    Building working relationships across a community is an 
intrinsically good thing. You do enough intrinsically good things and 
lives will be improved in ways you can never plan or predict. This is 
where our national renewal will come from.
                               __________
Response from Mr. Crim to Question for the Record Submitted by Senator 
                                 Hassan
    The COVID-19 pandemic has simultaneously caused a dramatic growth 
in the need for nonprofits' services and a significant decline in their 
financial resources. While the Congressional response so far has 
ensured that nonprofits have access to the same economic relief as 
businesses, significantly more needs to be done to help these 
nonprofits stay on firm financial footing. Could you comment on how the 
COVID-19 crisis has affected nonprofits' financial standing?
    In Utah, we've seen a steep increase in needs, while at the same 
time many nonprofits are fighting to survive. According to a survey 
conducted by the Utah Nonprofits Association ``nonprofits in Utah 
report layoffs, lost revenue, canceled events, and curtailed services 
in response to the COVID-19 pandemic. Reduced revenue from events, 
combined with decreases in donations and the need for social distancing 
have led 24% of nonprofits surveyed by UNA to temporarily suspend 
services--creating gaps in the social fabric as the neediest among 
society lose access to housing, food, and family support.
    Nearly two thirds (61%) of nonprofits told UNA that in response to 
social distancing, they had slowed, temporarily suspended, or decreased 
services--even as the demand for their services increased. Fifty-two 
nonprofits in Utah have canceled 1,493 events--eliminating $11,795,501 
in revenue. Another $4,091,941 was spent to restructure events and move 
them online. In a March UNA survey of nonprofits, 68% of respondents 
believed that the COVID-19 would negatively impact finances. It is 
clear from these numbers, that these predictions were accurate. The 
decline in financial security may also be more rapid than anticipated. 
In the March survey, 41% of nonprofits reported cash reserves equal to 
or greater than six months of expenses. Six weeks later, only 32% of 
those surveyed reported that same level of financial security.
    Nonprofits have responded to the increased financial pressure by 
seeking new sources of funding and looking for partnerships with 
businesses and other nonprofits. Over half (52%) of nonprofits have 
identified new revenue streams--but only 32% have actually secured new 
funding.
    Nonprofit sector job losses in response to the pandemic are 
sobering. In the UNA survey, 14 employers reported laying off 102 full-
time employees and 185 part-time staff members. Layoffs will continue; 
those surveyed anticipated furloughing another 18 full-time staff 
members and 68 part-time employees. According to the U.S. Bureau of 
Labor and Statistics, nonprofits employ 6.7% (78,235) of Utah's 
workforce. Applying these numbers to Utah's over 10,000 nonprofit 
organizations indicate that the organizations who serve our most needy 
are, or could be in need themselves.''
    Nationally, the picture is similar. The National Council of 
Nonprofits estimates that ``1.6 million nonprofit jobs have been lost 
through June. (data source, page 14 [Johns Hopkins Center for Civil 
Society Studies 2020 Nonprofit Employment Report]). It will take 
several years to determine how many nonprofits have folded, and 
nonprofits are in grave danger of having their budgets impacted now 
more than ever. Beyond the initial wave from COVID-19, we are bracing 
for another financial challenge as state budgets shift as they 
individually respond to this economic crisis. Nonprofits receive a 
third of their revenue from states and should that revenue stream 
constrict, nonprofits will be left without critical resources to do 
their work.''
                               __________
Response from Dr. Osili to Question for the Record Submitted by Senator 
                               Klobuchar
    Research shows that wealthier Americans have contributed an ever-
increasing proportion of total charitable giving in recent years. 
Meanwhile, many young Americans in their twenties and early thirties 
have thus far chosen not to engage in charitable giving.

      How could instituting a substantial universal deduction 
for charitable giving encourage younger Americans to develop a habit of 
charitable giving that will encourage continued giving as these men and 
women advance in their careers?

    Before the COVID-19 crisis, our research finds a majority of 
Americans give to nonprofit organizations at some time. However, the 
number of Americans who give in any single year declined by more than 
ten percentage points from 2000 to 2016. The overall rate of Americans 
who give declined from 66.22% of Americans in 2000 to 53.94% of 
Americans in 2016. Volunteering has also fallen during this period. 
Also, that decline is concentrated among younger adults--a worrying 
sign about the future trends in giving.
    A universal deduction for charitable giving provides tax 
recognition of every American's gifts, both those who itemize and those 
who do not.
    Charitable giving tends to be habit-forming--when an individual 
makes a charitable donation, that individual is more likely to continue 
to give and to give more over time. We have also documented that 
households that itemize have seen a far smaller decline in their 
participation in charitable giving over time. A universal deduction 
would be more likely to benefit younger people (who tend to be 
nonitemizers). It can boost lifetime charitable involvement while 
providing a potential opportunity to bolster participation in 
charitable giving.
                               __________
    Response from Dr. Osili to Question for the Record Submitted by 
                       Representative Schweikert
    To what extent is indirect, social media-driven giving unaccounted 
for in the data of charitable giving?
    Social media giving including crowdfunding is becoming an 
increasingly important tool, especially for online fundraising. Giving 
USA only takes into account crowdfunding donations that go to 501(c) 3 
organizations. It does not include crowdfunding that represents 
informal transfers between individuals (or person-to person transfers) 
in its estimates.
    While we have data on social media giving that is directed toward a 
501c(3) charitable organization, through tax data reported by 
charities, we have less information about giving to a tax-deductible 
organization--giving to a business, a 501c(4), an individual. In 
general, Giving USA only measures formal U.S. philanthropy, i.e., 
giving directed to tax-deductible charitable organizations.