Note: This blog was co-authored with JoAnne Berkenkamp.
On Friday, Congress passed a doozy of an omnibus budget bill, including landmark legislation to expand the donation of food that might otherwise go to waste. This was not about nibbling at the edges - this was the real deal. With only a small fraction of the food that could potentially be donated by grocery stores, foodservice and restaurants actually being donated, the timing couldn't be better to make it easier to donate food and have it reach people in need. The new law includes several vital policy changes:
Opening up tax benefits to more types of food donors and making the tax breaks permanent: Until this legislation passed, only "C Corporations" were eligible for permanent, enhanced tax deductions when they donate food. In practice, this meant that only larger companies benefited from these tax benefits. Most farmers, independent grocery stores, small restaurant chains, franchise operations and other smaller businesses were excluded. The new law incentivizes these other potential donors by making them eligible for the tax deductions enjoyed by larger companies, and making that tax benefit permanent, rather than available only on a piecemeal temporary basis.
Increasing the cap on donations: Until this legislation, the maximum deduction was limited to 10% of the donor's net income. As a result, donors could readily "max out" the cap, disincentivizing further donation. With this newly passed legislation, the cap is lifted to 15% -- another step in the right direction.
Clarifying the value of donated food: Anyone who is beginning to contemplate this year's tax filing knows that complicated tax rules can get in the way of the best intentions. That has been true for food donations, too, as complications around determining the value of donated food threw up another roadblock to donation. The new law clarifies and simplifies the calculations, another welcome move for potential donors.
We're happy to say that Congress got it right on this one. Kudos to the growing cadre of legislators who recognize that political leadership will be key to surmounting hunger in American and reducing today's colossal levels of food waste--especially Congresswoman Chellie Pingree who recently introduced a bill to comprehensively attack food waste. Now we look forward to businesses from farm to fork ramping up efforts to channel their surplus food to people in need. Our communities, the environment and your bottom line will thank you.