Tax Law Impact; More Distributions; Giving Back; Rebranding

September 15, 2020 — Impact on charitable giving unclear as fewer Mass. taxpayers itemize… Nonprofits seek higher minimum distribution from foundations, donor-advised funds… Community Servings gives back to restaurant partners… WGBH rebrands to GBH.

Impact on Charitable Giving Unclear as Fewer Mass. Taxpayers Itemize

Newly released data show that the number of Massachusetts filers that previously itemized their charitable contributions fell by 60% in the year in which a new federal tax law went into effect, which, in effect, encouraged many taxpayers not to itemize.

The law, which took effect in 2018, made the standard deduction more attractive, which meant that fewer taxpayers would itemize their deductions, which caused concern in the nonprofit world that support for their causes would drop. However, it is not clear if that came to pass, as there is no central database that tracks total individual giving to Massachusetts nonprofits.

In 2017, just over one million Massachusetts filers itemized their charitable contributions, a number that dropped to about 422,000 in 2018, according to the Boston Business Journal (BBJ).

According to Giving USA, giving by individuals nationally fell by an estimated 3.4% in 2018, compared to the year before, and decreased as a percentage of total giving in 2018 to 68%, down from 70% in 2017.

The charitable deduction enables filers to write off their donations, which means that if hundreds of thousands Massachusetts residents are now taking the standard deduction who previously didn't, they may donate less since they cannot realize savings on their federal tax returns.

Nonprofits Seek Higher Minimum Distribution from Foundations, Donor-Advised Funds

A coalition of nonprofit groups recently called on the U.S. Senate to update the laws governing private foundations and donor-advised funds (DAFs) to increase the required distributions to 10% annually for three years to assist charities overwhelmed by the coronavirus pandemic.

The proposal mandates a temporary doubling of private foundation payout from 5% to 10% for three years, and established a similar 10% payout for DAFs that currently have no mandate.

A DAF enables donors to contribute cash, securities, or other assets to a fund and take an immediate tax deduction, and then direct which charities those invested funds should support. However, it is not uncommon for funds contributed to a DAF to sit idle for years.

The proposal was put forth in letter sent in May by the Charity Reform Initiative of the Institute for Policy Studies, a group of high-net worth Americans, business leaders, and investors called Patriotic Millionaires, and the Wallace Global Fund. Another 550 philanthropists and leaders of foundations, as well as several thousand nonprofit leaders and staff.

The letter noted that "in this time of unprecedented crisis, the money [from foundations and DAFs] is not reaching charities fast enough.”

Community Servings Gives Back to Restaurant Partners

Community Servings, a Jamaica Plain-based nonprofit that delivers meals tor the critically ill in their homes across the state, which historically has depended on contributions from restaurants, is returning the favor to help the industry that has been, and likely will continue to be, severely impacted by the coronavirus pandemic.

The organization recently established a web page that lets visitors purchase a gift card to support its 125 restaurant partners.

"Since our founding 30 years ago, chefs, restaurateurs and caterers have provided unwavering support to help us feed critically and chronically ill neighbors across the region," the website notes. "Now, we ask that you join us in returning the favor. By purchasing a gift card, safely picking up take-out, or signing up for delivery, you are not only helping to ensure that our local restaurant industry survives, but that it can return and thrive."

WGBH Rebrands to GBH

WGBH in Boston, a nonprofit broadcaster and the largest developer of content for the Public Broadcasting Service, recently announced it rebranded, dropping the broadcast-centric “W” from its name, seeking to be known as GBH.

For nearly 70 years, the W in WGBH’s call letters reflected that it was a broadcast licensee east of the Mississippi River (while most licensees on the west side have call letters beginning with a K). But with more than half of its audience impressions coming via digital platforms, including streaming, apps, podcasts, and social media, the organization said it dropped the "W" to better reflect its leadership in the new media environment.

“While our name is changing our mission remains the same: to harness the creative spirit and reach of public media to deliver compelling experiences, stories and information to audiences, wherever they are,” said Jon Abbott, president and CEO of GBH. “Our vision is to be a pioneering leader in media that strengthens, represents, and serves our community, fostering growth and empowering individuals.”