Charity begins at home? Nope- no more.

No Gravatar

Are you going to be surprised that charitable donations are down this year? I’m certainly not.

Given the change to the tax code- rendering fewer people capable of itemizing deductions- this should have been the most obvious conclusion, besides the fact that the new tax code favors Republican states and the rich.

Back in 2016, some 45 million folks itemized their deductions. That number has been decimated to less than 20 million in 2018!
Yet, overall, the drop in charitable funding doesn’t sound large- only 1.7%. But, that’s because foundations and corporations upped their ante, masking the drop in individual donations. For example, foundations provided more than 1/7 (18%) of every dollar contributed to charity in 2018 and corporations increased their funding as well (up by 2.9%). It was individual households that cut their charitable funding by 3.4%.

Giving USA 2019

Total charitable donations in 2018 were about $ 427.7 billion- the first drop in charitable donations since the Great Recession. And, that drop was despite the increase in disposable income in 2018.

By the way, since most religious organizations are funded by individuals, it should also be totally expected that their funds dropped almost 4%. As did United Way and other public service charities see a drop (of some 6% to funds of that ilk).

(You do know that if you are over 70.5 years of age, you can elect to have your minimum required distribution from your IRA go directly to charity.  That doesn’t make it deductible- but it does mean that you owe no income taxes on that distribution.)

Doesn’t look good for American charities.  Unless, of course, you are those political organizations masking themselves as charities to benefit from ill-thought SCOTUS decision, Citizens United.

Roy A. Ackerman, Ph.D., E.A.

Share this:
Share this page via Email Share this page via Stumble Upon Share this page via Digg this Share this page via Facebook Share this page via Twitter
Share

12 thoughts on “Charity begins at home? Nope- no more.”

  1. Interesting “unintended consequence”. I wonder what I will find out about our local United Way campaign when my employer introduces it to us in September. And, no, i didn’t know that about minimum required distributions although I am still several years away from that.

  2. I didn’t no about the being over 70.5 years old and having the distributions from IRA going directly to charity.

  3. Interesting information about the difficulty that nonprofits experience when trying to get donations. It looks like a lot of change is necessary to get things back on track for the nonprofits.

  4. You are a very deep thinker Roy.Charitable deductions are needed for multiple reasons.When that drops one has to wonder whether its just the tax codes or something deeper.

Comments are closed.