Interested in how the new tax reform (Tax Cuts & Jobs Act, or TCJA) will impact charitable giving in 2018 and beyond?
This is a hot topic in fundraising, and for good reason: it drastically reduces the percentage of households that will be able to itemize their charitable deductions.
The new tax law reduces the number of itemizing households (currently 30% of HHs) by nearly doubling the standard deduction (to $24,000 for couples), and capping state and local tax deduction at $10,000.
- The impact of the new rules will be felt most by people earning $100K-$350K (who typically give in the $1K-$9,999 range.) People in the lowest and highest income brackets won’t be affected.
- Estate tax exemption doubles to $22 million for couples, which will discourage tax-motivated bequests by the very wealthy.
However, the new tax law also increases the after-tax income for most households, and discretionary income is one of the primary predictors of charitable giving. This effect is especially true for those high-income households, which means major donor income should increase given adequate personal cultivation. It is our belief that organizations that invest in cultivating mid-level and major donors will continue to see revenue growth, barring any substantial changes in the economy.
To continue this important discussion, Lori Connolly, VP of Research & Analytics at One & All will be hosting a new and updated webinar to provide the latest insights. Be sure to join us:
WEBINAR: Updates on the New Tax Law
Thursday, August 2nd, 2018 at 10:30am – 11:30am PST (1:30pm EST)