Strong corporate social responsibility initiatives have proven to increase employee engagement, creativity, and retention. For companies, however, it’s often hard to establish giving programs that empower employees to engage in a simple and accessible way.
On July 26, 2018, the Everyday Philanthropist Act (H.R. 6616) was introduced to the House of Representatives by Congressman Erik Paulsen (R-MN) and cosponsored by Representatives Mark Pocan (D-WI), Mike Gallagher (R-WI), Cheri Bustos (D-IL), Tim Walberg (R-MI) and Ami Bera (D-CA). The legislation would establish a new model for employee giving and allow companies to wholeheartedly adopt a simple and effective corporate giving initiative.
The Everyday Philanthropist Act would empower everyday, working Americans to give back with a Flexible Giving Account (FGA). An FGA is a pre-tax payroll deduction for employee giving. Eligible employees would set up an FGA through their employer, set aside part of their paycheck pre-tax to donate to a charity of their choice, and immediately see their taxable income reduced.
The majority of Americans are non-itemizers, and therefore don’t currently receive tax incentives for their charitable donations. As the primary backer of the Everyday Philanthropist Act, The Greater Give believes ALL working Americans deserve the same opportunity to lower their taxes by giving to their communities. With an FGA, millions more Americans would be empowered to give back, allowing us to dramatically increase America’s charitable donations. The legislation has already garnered public support by many in the charitable sector such as Community Health Charities, America’s Charities, and Wisconsin Philanthropy Network.
The FGA is modeled after similar consumer-directed accounts such as FSAs, HRAs, and HSAs. In this way, an FGA would allow employers to take charge of employee giving in an easy and accessible way.
This legislation would revolutionize employee giving by:
- Empowering employees of all tax brackets to give to the charity of their choice.
- Reducing the employer’s payroll taxes.
- Cultivating a movement of shared responsibility between employers and employees.
The Everyday Philanthropist Act is a win for employees, employers, charities, and Congress.