April 26, 2019
Charitable Giving Was Up Last Year, But 2018 Is Questionable

June 24, 2018 — While individual charitable giving rose 5.2% nationally last year, over the year before, Massachusetts nonprofits are carefully eyeing current giving levels in light of revisions in the federal tax code, which a new report suggests could lead to a 6% drop in household charitable giving this year.

The new tax law, which took effect Jan. 1, doubled the amount of the standard deduction that individuals can claim on their tax returns, which, according to analysis by the Tax Policy Center, could slash the number of individuals utilizing the charitable giving tax deduction by more than half, leading to reduced charitable giving.

The American Enterprise Institute has estimated household charitable giving could fall by $17 billion, or about 6%, this year.

According to the Giving USA Foundation, which earlier this month released its Annual Report on Philanthropy in America, giving by individual, foundations, bequests, and corporations all increased last year. Individuals gave the most—$286.65 billion—accounting for 69.9% of the total $410.02 billion in charitable giving.

Massachusetts nonprofit leaders said the new law would lead to lower charitable giving, potentially costing Bay State nonprofits millions of dollars.

Many Massachusetts nonprofits posted fundraising records at annual galas this spring, but the lack of a comprehensive nonprofit fundraising source makes it difficult to fully ascertain current charitable giving levels.

Last month the Center for Effective Philanthropy (CEP), a Cambridge-based nonprofit organization that develops data to help funders improve their effectiveness that, reported, based on a national survey it conducted, 53% of nonprofits and 53% of funders were concerned that the new federal tax law about lead to reduced charitable giving.

Although individual giving las year was up 5.2% over 2016 levels, corporate giving was higher, at 8.0%, according to the Giving USA Foundation. Foundation giving was up 6.0%.

Una Osili, associate dean for research and international programs at the Indiana University Lilly Family School of Philanthropy, said, “Economic growth contributed to these widespread increases in 2017, and there is heightened interest in the overall economic environment and other factors that can help nonprofits sustain this growth over time.”

Here's how key charitable sectors fared nationally in 2017, compared to 2016:
  • Giving to religion increased 2.9% (0.7% adjusted for inflation), receiving an estimated $127.37 billion in contributions.

  • Giving to education is estimated to have increased 6.2% (4.0% adjusted for inflation) to $58.90 billion.

  • Giving to human services increased by an estimated 5.1% (2.9% adjusted for inflation) totaling $50.06 billion.

  • Giving to foundations is estimated to have increased by 15.5% (13.1% adjusted for inflation) to $45.89 billion, based on data provided by the Foundation Center.

  • Giving to health organizations is estimated to have increased by 7.3% (5.1% adjusted for inflation) to $38.27 billion.

  • Giving to public-society benefit organizations increased an estimated 7.8% (5.5% adjusted for inflation) to $29.59 billion.

  • Giving to arts, culture, and humanities is estimated to have increased 8.7% (6.5%) to $19.51 billion.

  • Giving to international affairs is estimated to have declined 4.4% (6.4% adjusted for inflation) to $22.97 billion.

  • Giving to environment and animal organizations is estimated to have increased 7.2% (5.0% adjusted for inflation) to $11.83 billion.
Giving levels were not broken out by state.

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