Charitable giving is a critical way in which Americans participate in a pluralistic civil society, thereby fostering social connectedness. Yet, over the last two decades, millions of households have dropped out of the ranks of nonprofit donors. Our tax code deserves some of the blame.

The charitable tax deduction was intended to incentivize taxpayers to support charity. But it only benefits a relatively small number of donors. That’s because it’s only available to people who itemize their tax deductions -- those whose state and local taxes, mortgage interest payments and charitable donations exceed the “standard deduction” ($14,600 this year, $15,000 in 2025 for single taxpayers and married individuals filing separately). For those who claim the standard deduction, the charitable tax deduction doesn’t apply at all.

To further skew the outcome, the wealthiest donors get outsized tax breaks. When a taxpayer in the highest federal tax bracket, currently 37%, makes a $10,000 donation to a charity, she can save up to $3,700 in taxes. But an itemizer in the lowest federal bracket would only reduce her taxes by $1,000. So, the greatest tax savings disproportionately -- and undemocratically --go to the biggest earners.

The roughly 10 percent of households that itemize their deductions are responsible for about 65 percent of the nation’s charitable donations. But what if the charitable tax deduction were repealed and, instead, the Government were to give matching grants to nonprofits, tied to the value of the donations they receive?

Robert McClelland, a senior fellow in the Urban-Brookings Tax Policy Center, claims that more people would support charities if their donations were matched by the Government. He believes that enjoying the satisfaction of supporting a charity we’re passionate about, while catalyzing Government to do the same, would provide an instant emotional return on our charitable dollars, motivating more of us to donate.

In Mr. McClelland’s view, while more lower-income taxpayers would be encouraged to donate to charity, higher-income taxpayers, whose donations are subsidized by all of us, would no longer be favored. Charitable giving, he believes, would become democratized, for the benefit of all of us.

Dean Karlan and John A. List, economics professors at Northwestern University and the University of Chicago respectively, buy into Mr. McClelland’s logic. To go a step further, their analysis suggests that people would react to Government matches just as they positively respond to discounts in the commercial marketplace, no matter the dollar amount of a price cut. If that’s true, the Government’s match needn’t be anywhere near dollar-for-dollar to attract donations from more people, achieving the financial and social impact that sound public policy demands.

Swapping charitable tax deductions for Government grants would certainly increase tax revenue and allow for more targeted funding. But it would likely lead to higher administrative costs and, contrary to the academics’ working thesis, could actually result in decreased charitable giving. Still, matching grants just might help reverse the continuing decline in small-dollar donors. One way or another, Congress should promote a broader base of participation in charitable giving as an intrinsic social good.