Trump Tax Changes Result in Reduction in Charitable Giving

A report published in June by the Giving Institute, a nonprofit that studies philanthropy, finds that charitable giving has dropped in the wake of tax code changes implemented under the Tax Cuts and Jobs Act of 2017. The nonprofit Marketplace reports that the near-doubling of the standard tax deduction for most Americans under the act has made itemizing deductions—formerly an incentive to donating to nonprofits—less attractive.

Marketplace notes, “Many charities have reported declines in giving since the law went into effect. In the first half of this year, fundraising revenue was down 7.3% compared to the same period last year for more than 4,000 organizations tracked by the Fundraising Effectiveness Project. And in 2018, total charitable contributions from individual Americans was down 3.4%, according to the Chronicle of Philanthropy.”

According to The Washington Post, while charitable giving as a whole has been essentially flat since the changes to the tax code were introduced, that fact masks the uneven distribution of donors and recipients. Wealthier people and charitable foundations, the paper reports, tend to give to larger, wealthier institutions, while smaller local organizations rely on donations from less-wealthy individuals—those who are no longer encouraged by the prospect of itemized deductions to make donations.