President Donald Trump’s 2017 tax reforms ended the requirement for many Americans to itemize their charitable donations, and that may be why fewer Americans are giving than ever before.
The ultrawealthy have been picking up the slack and keeping donation totals from dropping, despite facing ever-increasing criticism over their charitable giving.
All in all, Americans gave $449.64 billion to US charities in 2019, just short of the record-breaking total given in 2017.
Experts are hopeful that the coronavirus crisis and the social unrest following George Floyd’s death will inspire more Americans to start donating again.
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Fewer and fewer Americans are giving money to charity.
While historically Americans of average wealth — not billionaires — have funded most of the country’s nonprofits, including hospitals, universities, cultural institutions, and houses of worship, the trend has begun to reverse, philanthropy experts have observed.
The number of Americans that participated in charitable giving first began to decline during the Great Recession but never picked back up as the economy recovered, according to experts from the Indiana University Lilly Family School of Philanthropy (IUPUI). However, donation totals have stayed constant or even risen as ultrawealthy donors pick up the slack.
“We call this ‘dollars up, and donors down,'” IUPUI Associate Dean Una Osili said during a virtual press conference hosted by the Giving USA Foundation. “That is really a trend that has been accelerated by the Great Recession and one that we’re concerned that tax reform passed in 2017 may accelerate further.”
The Tax Cuts and Jobs Act reduced Americans’ tax bills an average of $1,260 and potentially boosted the economy, but remains largely unpopular with the American public. One of the biggest changes the Act made for taxpayers was raising the standard deduction for charitable contributions, virtually eliminating the need for many taxpayers to itemize their donations.
All in all, Americans gave a near-record $449.64 billion to US charities in 2019, according to Giving USA’s Annual Report on Philanthropy. The report, released June 16, found that 2019’s total rose 4.2% over 2018’s total, but did not surpass 2017’s record-holding amount of charitable giving.
Even as the wealthy comprise an ever-growing share of the country’s charitable giving, they’ve been facing growing anti-billionaire sentiment
In January, Jeff Bezos was fiercely criticized online for donating only $690,000 of his centibillion-dollar fortune to Australian bushfire relief, while Indian billionaire Mukesh Ambani was ridiculed for ringing a bell from the balcony of his 27-story mansion to thank healthcare workers amid the coronavirus pandemic (Ambani later donated $66 million to coronavirus efforts).
But it’s not just how much you give that matters, it’s where the money came from. Multiple museums publicly stopped accepting donations from the Sackler family of OxyContin wealth and a Whitney museum leader linked a company that makes tear gas and other law enforcement supplies quit amid protests.
Many American donors are baby boomers aged between 53 and 73, which makes sense — by and large, they’ve had the most time to achieve …read more
Source:: Business Insider