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Donations to Charities Drop After Trump Tax Law

Michael Rainey
Americans gave less money to charity in 2018 and some experts think the GOP tax overhaul is to blame.Total donations fell 1.7% in inflation-adjusted terms to $427.7 billion last year, according to Giving USA’s annual report released Tuesday. By comparison, charitable donations grew 3% the year before.The Tax Cuts and Jobs Act eliminated the benefit of the tax deduction for charitable donations for millions of Americans by doubling the standard deduction. About 88% of taxpayers took the standard deduction for 2018, with the number of filers itemizing their deductions falling from 46.5 million in 2017 to 18 million in 2018. As many charities warned might happen, the change appears to have had a significant negative effect on individual giving, which dropped 3.4% in 2018.  Some types of organizations were hit harder than others. While environmental and animal-related organizations recorded a 1.2% increase in donations, religious organizations saw 3.9% decrease and public-society benefit organization such as the United Way saw a 6% drop.Although some experts say that instability in the stock market at the end of 2018 could have played a role in the drop, Steve Taylor, a vice president at United Way Worldwide, told the Washington Post that “[t]here really is no other explanation for these numbers than changes to the tax law,” adding that he expects the downward trend to continue as more potential donors take the new tax rules into account.Like what you're reading? Sign up for our free newsletter.

Americans gave less money to charity in 2018 and some experts think the GOP tax overhaul is to blame.

Total donations fell 1.7% in inflation-adjusted terms to $427.7 billion last year, according to Giving USA’s annual report released Tuesday. By comparison, charitable donations grew 3% the year before.

The Tax Cuts and Jobs Act eliminated the benefit of the tax deduction for charitable donations for millions of Americans by doubling the standard deduction. About 88% of taxpayers took the standard deduction for 2018, with the number of filers itemizing their deductions falling from 46.5 million in 2017 to 18 million in 2018. As many charities warned might happen , the change appears to have had a significant negative effect on individual giving, which dropped 3.4% in 2018.

Some types of organizations were hit harder than others. While environmental and animal-related organizations recorded a 1.2% increase in donations, religious organizations saw 3.9% decrease and public-society benefit organization such as the United Way saw a 6% drop.

Although some experts say that instability in the stock market at the end of 2018 could have played a role in the drop, Steve Taylor, a vice president at United Way Worldwide, told the Washington Post that “[t]here really is no other explanation for these numbers than changes to the tax law,” adding that he expects the downward trend to continue as more potential donors take the new tax rules into account.

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