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New Tax Code is Hurting Philanthropy, Study Suggests

February 28, 2019

The new tax code appears to be hurting philanthropy, according to news reports.

Despite a growing economy, charitable giving increased only 1.6% last year, according to a study by the Fundraising Effectiveness Project, the Washington Post writes. And although gifts from major donors rose 2.6%, donations under $1,000 dropped 4%, according to the study put together by the Association of Fundraising Professionals and the Center on Nonprofits and Philanthropy at the Urban Institute, according to the paper.

The number of donors, meanwhile, shrank by 4.5% in 2018, according to the researchers, who focused on small and midsize nonprofits, the Post writes.

The 2018 tax overhaul disqualified millions of U.S. taxpayers from receiving charitable tax deductions, and charities warned that the measure would hurt donations, according to the paper.

An Indiana University study estimated last year that the new tax law would cause a 4.5% drop in donations, the Post writes.

(Getty)

While the new study suggests the drop wasn’t as dramatic, the 1.6% growth is still far behind the 3% to 5% annual growth expected in donations given the economic momentum, according to the paper.

A recent report from software firm Blackbaud, which tracks nonprofit donations, found a 2.3% drop in donations in December 2018 compared to December of the year prior, the Post writes.

By Alex Padalka
  • To read the Washington Post article cited in this story, click here.