Charitable giving rules may be changing… and we’re still counting our blessings
Well it’s that time of year again! Let the checklist begin:
- Ginormous Christmas turkey ready for its annual all-day bake-fest?
Check.
- Two pounds of pecans for your coveted yummy pie?
Check.
- Bing Crosby, dreaming of his famous white Christmas, crooning in the background?
Perfection.
- Another year-end forecast reflecting an increase in donations for your non-profit?
Well . . . maybe not.
Thanks to the proposed new tax bill, some economists predict this year may be the last for a four percent rise in individual philanthropic giving. In lieu of itemizing, the plan doubles the standard deduction to $12,000 for individuals and $24,000 for couples, making not itemizing much more attractive. (Currently and in the new proposal, taxpayers must itemize to take advantage of the tax deduction benefit.)
According to a study from Indiana University, “that change would lead to a reduction of up to $13 billion a year in charitable giving, and 28 million fewer Americans itemizing their returns. It could disproportionately affect certain kinds of charities that draw on the average American family such as churches,” (http://www.afpaustin.org/site/PageServer?pagename=Legislative_Updates).
Wealthy individuals who give tens of thousands of dollars a year may not be impacted since itemizing still makes sense for them. Smaller donors, however, who consistently give hundreds or thousands, could opt for the standardized deduction, in turn reducing their incentive to donate.
But do your donors give simply to gain a tax break? It certainly provides an incentive for a donation, but claiming an extra deduction is often just a “fringe benefit” to most people who contribute to their favorite cause. Those who sincerely donate to their faith or their nonprofit passion do so on the principles of commitment and charity; legislation based on the assumption that people give simply for a tax write-off is overly cynical…and sad.
In the bigger picture, maybe taxes – along with charitable giving – should be considered, and promoted as, membership dues to our country. As Congress debates the new tax bill, we can still be thankful for what our taxes “buy” us: supporting our brave men and women on the front line; ensuring the interstates are devoid of potholes on your way to grandma’s house; and enabling the FDA to ensure the food consumed during this year’s celebrations remains safe, just to name a few items.
Of course, here at Online Stewardship Accounting & Consulting Services we feel blessed for you – our clients who become our friends, and, in turn, trust us to help navigate the world of nonprofit management and finances. We’ll remain here for you in 2018, so please contact the OSA&C team at 904-398-4747 or Lynn@OnlineStewardship.com.
May you and your family be blessed with peace, security and happiness this holiday season. We wish you a very Merry Christmas and a joyous New Year.
