Year-end holiday giving is make-or-break time for America’s charitable sector. Donors who give now may feel compelled by the spirit of the season, but many also know they can write off their gifts and recoup a portion of their money.
But that latter incentive affects fewer people this year, thanks to a provision in the 2017 tax law that roughly doubled the standard deduction. As a result, the Congressional Budget Office projects that 31 million fewer households will itemize their taxes next year. Eliminating their tax incentive to give to charity.
Nonetheless, American generosity appears to be a more powerful force than economic incentive. Charitable giving was actually up by 2.6 percent during the first nine months this year compared to the same period in 2017, according to the latest quarterly report from the Fundraising Effectiveness Project of the Association of Fundraising Professionals and the Center on Nonprofits and Philanthropy at the Urban Institute.
This is especially notable because the project found, at the end of September 2017, that fundraising lagged four percent behind 2016’s rate. Americans, however, were generous in the final quarter of 2017, and the year-end 2017 figure ended up being four percent higher than 2016’s.
If that pattern holds this year, 2018 will have been a blockbuster year for charities. It would also call into question the arguments employed to make a case against the 2017 law’s increase in the standard deduction.