According to recent reports, America’s charitable giving seems to have slowed down a bit. Conducted by the Fundraising Effectiveness Project, the study claims that US charitable contributions have grown a measly 1.6% last year. What’s worse, anything under $1,000 had an even worse outing, with those kind of donations dropping 4%. This is bad news for a variety of reasons, but why did it happen? It seems as though recent tax changes are to blame.
Unless you’ve been living under a rock for the last three years, Donald Trump is the current President of the United States of America. One of 45’s biggest promises he’d made on the campaign trail was a reform to taxes. And on December 22, 2017, Trump made good on that promise with the “Tax Cuts and Jobs Act.” That reform to tax code greatly affected the way that we donate to charities. Unfortunately, under the new tax code, millions of Americans simply don’t qualify for charitable tax deductions, and because of this, they aren’t donating. This is further proven by the 4.5% decrease in donors.
The one thing to keep in mind is that the Fundraising Effectiveness Project reports on small-to-mid-sized companies. This means that, while these trends are evident in smaller nonprofits, they can’t be associated with larger nonprofits, like The Salvation Army or The United Way Worldwide. Studies on these larger charities will be conducted throughout the year to give a clearer idea of what the philanthropic landscape looks like.
But as far as smaller charities go, donations are down. This is bad news for anyone involved in these smaller nonprofits, and it won’t get any better if the current tax codes hold. Something must be done, and soon. While major nonprofits are certainly helpful, smaller ones are just as important, as they focus on immediately helping the various communities throughout the United States.
What are your philanthropic habits? Do you find yourself less likely to give with the current tax codes? Or do you still give, regardless of the tax breaks?