Report: Fewer Individuals Donating to Charity in Wake of Tax Law Changes

Chris Gaetano
Published Date:
Jun 18, 2019

Individual donations to charitable organizations dropped last year for the first time since the recession 10 years ago, according to the Washington Post. Total donations fell by 1.7 percent from the previous year, to $427 billion. This is in stark contrast with the 3 percent growth that was seen in 2017. Among individuals, the decline was even sharper, a 3.4 percent drop. This decline, however, was slightly balanced out with a rise in donations from corporations and foundations, which increased by 2.9 percent and 4.7 percent respectively. 

The overall fall-off could be attributed to the changes brought about by the Tax Cuts and Jobs Act, both directly and indirectly. While the law increased the maximum charitable deduction, it also doubled the standard deduction, while at the same time getting rid of most other deductions. With fewer people itemizing in general, this means fewer individuals see a benefit in making charitable deductions, even if the limit was raised. The Post noted that supporters of the tax law believe that increased economic growth would make up for the drop in charitable contributions. However, a recent report from the Congressional Research Service said that the TCJA had little effect on economic growth, which also means that the measure is still a long way away from paying for itself. 

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