The Tax Cuts and Jobs Act produced the biggest tax reform since the Reagan tax cuts. Over 90% of Americans benefit from lower rates and the average savings per full-time employed person is about $1800 this year. One of the other benefits for tens of millions is the lack of a need to itemize deductions. Just over 30% of Americans itemized deductions prior to the passage of the new tax law. That number should drop to the mid-single digits. One of the arguments against the law had been the concern of charitable organizations, that with fewer people needing to itemize, there would be less charitable giving due to the lack of tax benefit for most.
The charitable marketing firm Winspireme.com just wrapped up their 2018 charitable trends for all that’s happened through August and here are the highlights:
- Corporate donations: +2.7% (up from a 2.4% increase in 2017)
- Foundations: +6% (up from a 5.9% increase in 2017)
- Individuals: +3.2% (up from a 3% increase in 2017)
So, not only are charitable donations NOT suffering from the Tax Cut and Jobs Act. It’s evident that the improved economy is causing even bigger increases in charitable giving this year. It was always a false premise that generosity would only occur due to the deductibility of the donations. Instead, a better economy spurred by the tax cuts is leading to what projects to be new record charitable giving in 2018 after setting records last year.
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