The release of the Giving USA 2019 Report in mid-June was the first look at how the December 2017 tax bill has impacted charitable giving and nonprofits.
Nationally, charitable giving rose 0.7% to $427.2 billion from 2017 to 2018. This is a decline of 1.7% adjusted for inflation. These figures include giving from individuals, foundations, bequests and corporations. Giving by individuals fell 1.1% (minus 3.7% adjusted for inflation), which is of primary importance to many charities because individuals account for the largest donors to nonprofits. Foundation giving rose 7.3% (up 4.7% after inflation) with grantmaking from community foundations rising a strong 10.2%. (Lincoln Community Foundation gave a record $13 million in grants in 2018.) Bequests were unchanged from 2017 to 2018, and corporate giving grew 5.4% (2.9% after inflation).
With all these figures from a wide variety of sources, what have we really learned? The national data is mixed, and perhaps it is too early to project the impact of the new tax law too far in the future since we only have one year of data. We do know that the tax law changes allowed fewer individuals to itemize their deductions on their 2018 tax returns, because the standard tax deduction has nearly doubled in most cases. Therefore, many may not use the charitable income tax deduction.
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We hear concerns from some of our local nonprofits, particularly those that rely on smaller contributions, that giving is down slightly. Tax advisers have been urging many donors to “bunch” their charitable giving into Donor Advised Funds, which will allow them to still claim the charitable income tax deduction every other year but keep their year-to-year giving consistent. We have witnessed significant growth in the number of Donor Advised Funds at LCF, as well as in the amounts of donations to them and grants awarded out of them.
While the national numbers are mixed, our local nonprofits were rewarded with an incredible show of support on Give to Lincoln Day, May 30. The total of nearly $5.6 million was up nearly 21% over last year. This follows similar large increases of 25% and 20% in 2017 and 2016. We are a very generous community, whether directly to our favorite nonprofits and houses of worship, through LCF for Give to Lincoln Day, donor advised funds or other funds, or through workplace giving via United Way, the Community Services Fund or other giving federations.
In the coming years. we will see a clearer picture of the impact of federal tax law changes on our support of charities. One thing we already know is that the outpouring of support here in Lincoln and throughout Nebraska continues to grow, helping the causes close to our hearts.
As you consider how the tax landscape may affect your giving strategies, let us know how we can help. Visit www.lcf.org or call us at 402-474-2345.