$1.9 Trillion American Rescue Plan Will Affect Giving Only Indirectly

Last week, President Biden signed the American Rescue Plan (ARP), a $1.9 trillion package of initiatives aimed at facilitating the U.S.’s recovery from the health and economic effects of the COVID-19 pandemic. The ARP provides economic assistance to individuals in a variety of ways, primarily to Americans making less than $75,000/year (or couples making less than $150,000/year). It also extends the Paycheck Protection Program for businesses, creates block grants to help schools reopen and expand childcare, provides aid to state and local government, and much more.

What the ARP does not contain is any provision directly related to charitable contributions. For example, it does not extend further the charitable deduction for non-itemizers or the 100% of AGI limit election available for gifts of cash to public charities, both of which are set to expire at the end of 2021. Rather, the ARP’s effect on gift planning will depend on how much it hastens an end to the pandemic and catalyzes an economic recovery. The sooner those two things happen, the more confident donors will feel about their future and the more readily they will make outright and planned gifts.

We expect that Congress and the Biden Administration will turn their attention to a tax bill sometime in the next several months that, if passed, will assuredly have important implications for fundraising. Keep your eyes open for tax talk in Washington. We will be.