Tax Changes Could Change Charitable Giving
The holiday season is traditionally the time of year where donations to charity increase. But as MPB’s Mark Rigsby reports, possible federal tax changes could change the way Americans give to charitable causes.
The tax code overhaul, currently under consideration by Congress, could result in a decrease in charitable donations. Richard Gershon, a tax law expert at The University of Mississippi School of Law, says the changes would nearly double the standard deduction for taxpayers and some itemized deductions would be taken away. He says the result means 30,000,000 fewer taxpayers would be able to itemize their deductions, and that could impact the incentive for middle and upper middle class families giving to charity.
“People give to charity for different reasons besides the tax incentive. I think people will still give to charity, but they’re talking about a decrease of about 8%, is what people predict, to charities in the long run, because of the increased itemized deduction.”
Jane Alexander is President and CEO of the Community Foundation for Mississippi. The foundation handles tens of millions of dollars of endowment funds, and gives millions of dollars in grants to non-profits. She says she’s concerned about the tax changes.
“I can’t paint a doomsday scenerio, at least not at present, again, we haven’t seen the final provisions. But it will fundamentally change the way, I believe, people give, and how we interact with our donors and the charities we serve.”
Alexander says if the tax changes are made into law, people will continue to give. But she says charitable giving by donors would be less broad and more focused on specific charities.