Forty percent of U.S. nonprofits think the new federal tax overhaul will not have much effect on giving, and 10 percent think it will lead to increases, according to a survey released Monday.
Still, one in five nonprofits believes the changes will reduce giving from individuals, while 28 percent say too many changes were made to gauge what will happen, according to the study by the Nonprofit Research Collaborative, a coalition of professional fundraising associations that analyzes data on giving.
Melissa Brown, co-founder of the collaborative, said she expected more nonprofits to be worried about the tax overhaul, given the prominent news coverage and reports predicting the plan would reduce giving. The law doubled the standard deduction that any taxpayer can claim, significantly reducing the number of people who are likely to itemize deductions for charitable gifts and other expenses.
“The fundraisers are optimistic,” says Brown, who conducted the survey of more than 1,200 officials at nonprofits from late January to early March.
Most officials were based in the United States, though 146 were from Canada. (Only U.S. respondents commented on the tax law.)
More than half of organizations said they were developing plans to target donors who might have more discretionary income because of the tax law — or were at least planning on informing them of the changes. Twenty-nine percent of nonprofits said they did not plan to change their practices with donors who will benefit from the tax law.
Overall Giving Expectations
Roughly six in 10 nonprofits project that they’ll raise more money in 2018 over all, and 11 percent of groups said they expect to raise more than 15 percent over the sum they collected last year. Half forecast that they’ll raise 1 percent to 15 percent more, the study says. Eighteen percent project a decrease in giving in 2018, while 15 percent think giving will be flat, and 6 percent are unsure.
Many of the people who believe there will be a drop in giving appear to be most worried about the stock market and the economy, as well as how prepared their leaders, boards, and co-workers are to carry out plans to increase giving, Brown says: “Those are two things that are important for fundraising.”
Here’s how giving fared in 2017, according to the study:
- 63 percent of organizations raised more in 2017 than they did the year before, with one-fifth reporting gains of more than 15 percent.
- 43 percent saw increases of 15 percent or less.
- 27 percent saw decreases.
- 75 percent met their fundraising goal.
