Americans cut charitable deductions by $57 billion, leaving Texas charities in limbo

News

AUSTIN (Nexstar) — When local charities ask for donations on Giving Tuesday this year, they may ask for a bit extra.

The day is dedicated to donations, encouraging people to contribute to local non-profits. Charitable giving is down this year, according to data from federal tax filings.

Data from the Internal Revenue Service shows fewer charitable deductions filed for 2018— a drop that amounts to approximately $57 billion.

YearNumber of charitable contribution deductionsDollar amount
July 201833,629,985$160,031,240
July 201912,177,779$102,711,491

Source: IRS filing information

Fundraising experts attribute the dip to a handful of factors.

“We have seen a decline over the years of those smaller donations that often are really the heart of our community nonprofits,” Ashley Harriss, director of policy and community engagement for the United Ways of Texas, said.

“In particular, in 2018, we saw individual giving among those that are giving gifts less than $1,000 decline significantly,” Harriss explained. “This is really worrisome especially for our smaller nonprofits and rural communities as they rely on those small donations because they don’t have access to more wealthier individuals.”

One possible influence was donor fatigue. Another was the implementation of the federal Tax Cuts and Jobs Act, the tax-code overhaul in 2017.

“We know that a significant number of people changed the way they filled out the forms,” Adrienne Longenecker, chair of the Government Relations Committee with the Association of Fundraising Professionals, said.

“A significant number of people did not itemize their deductions,” Longenecker added. “Whether or not they were still giving? That’s a good question.”

Longenecker also serves as chief operating officer of Hill Country Conservancy, a Central Texas non-profit focusing on environmental protection.

“There may have been a natural disaster in another part of the world that truly compelled people to give differently than they would otherwise,” she mentioned.

“There are so many factors that go into philanthropy, that its complex. And, that’s part of what makes this report valuable, is that helps us to slice that complex pie by one piece, so that we can start to get a clearer sense of what the trends are.

As those tax changes loomed in 2017, some people opted for “batch giving”— or donating larger amounts while it benefited them financially, then holding off for the following years. Others attribute stock market fluctuation for donation decisions.

Some organizations are turning to alternative creative ways to solicit donations. The Salvation Army now puts a code on the side of its traditional red kettles so donors can scan and give digitally.

“We’ve got to make sure that all taxpayers have the ability and are promoted and encouraged to give to charities,” Harris said.

The IRS data does not include people who were granted a six-month extension on filing tax returns. The data also only shows one way charities receive donations. Some people give to charity without itemizing the money for their tax bill. Charitable groups can also get private corporate donations.

“We are encouraging everyone to give to what they are most passionate about and encouraging others to give,” Longenecker said.

Copyright 2019 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.