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Charitable Giving Increases Despite New Tax Law

Early indicators show donations increased in 2018, and experts predict continued growth in 2019

 

Both Blackbaud and the Association of Fundraising Professionals reported that charitable giving in the United States increased approximately 1.7% in 2018.  This is despite predictions of economic think tanks that the Tax Cuts and Jobs Act would result in significantly lower contributions.  For example, in June 2018 the American Enterprise Institute concluded the tax law would trigger a decline in giving by $17.2 billion, approximately 4%.

While the broader impact of the new tax law was overestimated, the Association of Fundraising Professionals’ Fundraising Effectiveness Project noted that smaller gifts have materially declined year-over-year.  Gifts under $250 dropped by 4.4% and gifts between $250 and $999 dropped by 4.0%.

In 2018, charitable growth was exclusively driven by donors giving more than $1,000, which increased by 2.6%.

“Research has consistently shown that major donor philanthropy is motivated by transformational impact, not by tax breaks,” said Bob Westfall, CEO of Westfall Gold and author of The Fulfillment Principle.

Experts predict that charitable giving will continue to increase in 2019 and 2020, subject to market conditions.  The Philanthropy Outlook for 2019 & 2020, researched and written by the Indiana University Lilly Family School of Philanthropy and presented by Marts & Lundy, forecasts total giving will increase by 3.4 percent in 2019 and by 4.1 percent in 2020.

“In order for non-profit organizations to grow in this environment, they must focus on deepening and growing major donor relationships,” noted Westfall.

 

About Westfall Gold

Westfall Gold is the nation’s premier major donor fundraising consultancy — helping clients raise more than $930 million to date to fuel life transformation worldwide. Proven over the course of 400+ events, the signature Westfall Gold major donor weekend continues to produce exceptional results for clients, generating an average ROI of greater than 5:1.

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