Charitable giving drops in first year of new tax laws

Posted on: June 20, 2019

“Charitable donations by individuals dropped last year by the most since the financial crisis as tax-law changes and a late-year stock-market dip dampened the effects of the growing economy, according to a report released Tuesday,” writes Richard Rubin in Tuesday’s (6/18) Wall Street Journal (subscription required). “Giving by individuals declined 3.4% in inflation-adjusted dollars to $292 billion, after four straight years of growing by at least 2.4%, according to the annual Giving USA report. Overall, giving was down 1.7% in inflation-adjusted dollars, with the decline in individual donations buoyed by corporations and foundations. Because tax-return data for 2018 aren’t yet available, the report is among the most comprehensive looks at one of the effects of the tax law that Congress passed in late 2017, and its findings mirror other analyses that found flat giving despite rising incomes…. The law cut individual taxes, but it also dramatically changed the incentives for charitable giving in ways that left nonprofit executives worried about what would happen…. Far fewer people now itemize their deductions, giving them less of a direct federal tax incentive to make donations…. It is too early to tell whether the 2018 decline will turn into a longer-term trend.”

Posted June 20, 2019