The Impact of New Tax Provisions on Individual Giving Appears Limited So Far
ST. LEO, FL – A November survey of 1,000 Americans by the Saint Leo University Polling Institute (https://polls.saintleo.edu) found a recent change in tax law seems to have had only limited effect on how much people give to charitable causes.
More than six in 10 Americans said they will give the same or more to charity this year as they did in 2018.
The Saint Leo University Polling Institute often inquires about respondents’ charitable giving plans as part of surveys conducted near the end of the calendar year. This year, 1,000 Americans responded between November 13 and 18, right before Thanksgiving. The margin of error for responses is plus or minus 3.0 percentage points.
In the 2019 survey, the institute asked people about their overall charitable giving compared to the prior year. It also asked people a follow-up question to assess any influences they may have felt in their giving because of the Tax Cut and Jobs Act, which went into effect in 2018, and which has a provision that worried many charitable organizations. The provision made it less attractive for many people to itemize taxable deductions, including charitable donations, and provoked worry that people might cease or curtail giving.
While the polling institute was conducting this survey nationwide, it also put the same questions to 500 residents in Florida, the home state of the polling institute. The question, as asked, is shown here, with the results.
Thinking about your charitable giving throughout 2019, which of the following best reflects your giving in all of 2019 compared to 2018. Would you say you are…?
|Giving level described||National %||Florida %|
|Giving more to charity in 2019 than last year||17.9||18.4|
|Giving about the same to charity as in 2019||45.6||46.8|
|Giving less to charity in 2019 compared to last year||8.8||10.6|
|Have not/will not be giving to charity in 2019||17.9||14.4|
A federal tax law change made in 2017 reduced the tax-deduction benefits to individuals and couples who make charitable gifts. Would you say that this change…?
|Possible answers||National %||Florida %|
|Did not affect my/our level of giving even though I knew about the tax consequences||41.6||43.8|
|Influenced me/us to give slightly less than before||12.2||16.0|
|Influenced me/us to give significantly less than before||8.1||9.4|
|I was not even aware of the change in the tax law||26.6||19.4|
Dr. Susan Kinsella, dean of Saint Leo University’s College of Education and Social Services, has been keeping track of the tax regulations and potential impact for some time. For many years, Kinsella noted, taxpayers had been able to reduce their taxable income by itemizing and legitimately claiming allowable deductions, which included donations to tax-exempt charities. Taxpayers also had the choice of taking the standard deduction instead if their financial profiles were simpler, but many middle-income taxpayers with homes found they saved more money on taxes if they itemized.
The new law, she noted, increased the standard deduction markedly for 2018, allowing individuals to claim $12,000 in 2018 (and $12,200 for the 2019 tax year) rather than the 2017 amount of $6,350. Married couples saw an increase from $12,700 to $24,000 (that will be $24,400 for the 2019 tax year). These changes mean that fewer people—by orders of tens of millions—need to itemize deductions to save on taxes and could choose to accept the higher standard deduction instead. Charitable organizations were concerned about whether some people would continue donating without a direct tax benefit to themselves.
And according to the most recent Giving USA report, charitable giving by individuals fell 1.1 percent in 2018, Kinsella noted. Charities are likely to adapt by focusing more of their fundraising attention on wealthier households that still itemize, Kinsella said.
“What is interesting about the study from the polling institute at Saint Leo University, is that the majority of respondents indicated their income levels were less than $75,000,” Kinsella said. Almost one-quarter, 24.6 percent nationally, reported income of $40,000 to $75,000, and another 27.5 percent reported income from $10,000 to less than $40,000.
Yet, of the majority of respondents in the national study are giving: 45.6 percent indicated they would give the same to charity as last year, and 17.9 percent would give more, for a combined total of 63.5 percent. “Therefore, it seems that although more middle-income families are now taking the standard deduction, many still seem to be donating to charitable organizations,” Kinsella said.
Giving may also be motivated by influences aside from tax benefits, Kinsella noted. She is interested in what research from multiple sources indicate about people’s religious or spiritual profiles. The Giving USA report identifies religious institutions as the type of nonprofits benefitting the most from donations, she said. “This is consistent with the data from the polling institute as well,” she said. The national data show that 23 percent consider themselves very religious, and 35.7 percent as somewhat religious, for a combined sum of 58.7 percent. And of those identifying themselves as religious in the national sample, 72.6 percent said they were giving more to charity this year, more than nine percentage points higher than the general population.
Other causes and motivations
Dr. Nancy Wood, director of the graduate program in human services administration at Saint Leo’s College of Education and Social Services, said it is also useful to consider the charitable giving findings in the context of other large influences in the culture. Levels of giving can be guided by factors aside from tax-deduction considerations and loyalty to established religions.
“With today’s political climate, Wood said, “people may be reallocating their charitable giving to political candidates.”
The convenience of donating through technology-based platforms and interest in emerging social causes may influence younger generations in their giving, she said.
“In 2019, technological advances provide donors the ease to give to a social cause that reflect their values. Younger generations tend to give to charitable causes that they feel connected to rather than institutional charities, like the Salvation Army. Donors tend to be more informed about the charities they donate to and care about where their monies are being allocated and what will be the impact from the donation.”
About the Poll
METHODOLOGY: This national survey was conducted from November 13 through November 18, 2019, among a base of 1,000 respondents nationally, using an online instrument. The national sample has an associated margin of error of +/- 3.0 percent at a 95 percent confidence for questions asked of all 1,000 respondents.
The Saint Leo University Polling Institute conducts its surveys using cutting-edge online methodology, which is rapidly transforming the field of survey research. The sample is drawn from large online panels, which allow for random selections that reflect accurate cross sections of all demographic groups. Online methodology has the additional advantage of allowing participants to respond to the survey at a time, place, and speed that is convenient to them, which may result in more thoughtful answers. The Saint Leo University Polling Institute develops the questionnaires, administers the surveys, and conducts analysis of the results. Panel participants typically receive a token incentive—usually $1 deposited into an iTunes or Amazon account—for their participation.
The Saint Leo University Polling Institute survey results about national and Florida politics, public policy issues, Pope Francis’ popularity, and other topics, can also be found here: http://polls.saintleo.edu. You can also follow the institute on Twitter @saintleopolls.
Media contacts: Jo-Ann Johnston, Saint Leo University, University Communications email@example.com or (352) 467-0843 (cell/text), or (352) 588-8237.
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About Saint Leo University
Saint Leo University is one of the largest Catholic universities in the nation, offering nearly 60 undergraduate and graduate-level degree programs to more than 19,500 students each year. Founded in 1889 by Benedictine monks, the private, nonprofit university is known for providing a values-based education to learners of all backgrounds and ages in the liberal arts tradition. Saint Leo is regionally accredited and offers a residential campus in the Tampa Bay region of Florida, 32 education centers in seven states, and an online program for students anywhere. The university is home to more than 95,000 alumni. Learn more at saintleo.edu.