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Tax Form Checkoff Programs Make Charitable Giving Less, Well, Taxing

Whether it’s to a charitable cause or their state’s general fund, Americans have many options to give with the check of a box.

By Mandy Rafool and Andrea Jimenez  |  April 17, 2023

Taxes are top of mind as Americans scramble to meet deadlines for filing returns in April. What they might not appreciate tomorrow amid the stress of tax day, however, is how easy it has become to donate to a favorite cause by simply checking a box on the state tax form.

Checkoff programs, as they’re known, offer taxpayers an easy way to donate part of their tax refund to charity. Colorado was the first state to adopt such a program in 1977 when it introduced the “Chickadee Checkoff” to preserve nongame and endangered wildlife. The idea took off. Now, taxpayers in every state with an income tax can donate to at least one program.

States across the country currently offer a total of 433 checkoff programs, nearly double the number from 20 years ago, according to the Federation of Tax Administrators. New York tops the list with 33 options, New Jersey follows with 31, and Oregon rounds out the top three with 28 donation choices. At the other end of the spectrum are Minnesota and Nebraska, which each offer just one program for wildlife conservation.

Whether it’s to a charitable cause or their state’s general fund, Americans have many options to give with the check of a box. Some of the most common are:

  • Wildlife and nongame conservation efforts: 36 states.
  • Child abuse prevention trusts: 20 states.
  • Disease prevention and research programs: 26 states.
  • Veteran support and military family relief programs: 30 states.

The amount of revenue the programs generate also varies greatly, depending on state size, taxpayer wealth, current economic conditions and popularity of the cause. Donations to fight homelessness, for example, which has exploded in recent years, saw a substantial year-over-year uptick in Colorado, where the “Homeless Prevention” checkoff increased 85%, from $128,000 in 2020 to $237,000 in 2021. That presents a stark difference to Arkansas’ “Tax Me More Fund,” which collected a mere $2,500 over nine years. (That fund’s lack of success was not lost on lawmakers and has since been repealed.) Similarly, Arizona has a box for civic-minded taxpayers to voluntarily donate to the state general fund. The “I Didn’t Pay Enough Fund” generated nearly $19,000 in 2022 and has collected more than $184,000 since its inception in 2010.

Check-Box Skeptics

The proliferation of checkoff boxes across the country has drawn fire from critics who claim the programs lack oversight and cite instances in which recipient agencies haven’t distributed the funds in a timely manner or in the way in which they were promoted. A 2015 Associated Press review of tax checkoffs in California that found nearly $10 million in donations went unspent as the result of a lengthy bureaucratic maze.

Others point to the sheer number of programs in some states. In addition to administrative challenges, multiple options can cause donation levels for any one charity to go down. Policymakers have responded by capping the number of checkoffs that are allowed or by setting minimum contribution requirements. For example, Delaware imposed a program cap of 21 in 2017 and Iowa has a limit of four. Colorado caps checkoff boxes at 20 and requires programs to collect at least $50,000 in the first nine months of their third year to remain on the form in future years.

States also are acting to rein in administrative costs. Connecticut’s department of revenue withholds a percentage (typically 7.5%) of taxpayer contributions to a particular fund to cover administrative costs. Oregon’s revenue department estimates the administrative cost for each checkoff program and sets aside 10% of donations received each month until the reserves equal those estimated costs.

But criticism aside, checkoff boxes appear to be here to stay. Taxpayers like the ease of giving, and charities enjoy donations they might not receive if they weren’t on the tax form.

For more: See NCSL’s state-by-state breakdown of income tax checkoff programs.

Mandy Rafool directs NCSL’s Fiscal Affairs Program; Andrea Jimenez is a policy analyst in the program.

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