Biden. New Tax Laws. Charitable Giving. Upcoming Webinar.

Biden. New Tax Laws. Charitable Giving.

The election is over, and the Democrats are in charge. What does this mean for charitable giving?

Of course, we have to see what unfolds, but now is a good time to prepare.

There are upsides and downsides with every administration. Discover them in this webinar.

  • Review recent changes.
  • Preview possible changes that might come to the tax code.
  • Consider how these changes will affect philanthropy.
  • Learn how your donors are thinking and how to think like them.
  • Know what to tell your donors.

All you need to know so you don’t look dumbfounded. Stay informed!

Date and Time: Jan. 26 at 2 pm EST

Admission: $25. Attendance limited. Click here for more information and to register.

What ever happened to the $54 billion decline in Philanthropy due to the drop in itemizers as a result of the 2018 tax bill?

Have you ever gotten nervous over a weather prediction – storm or otherwise – you see right there on your computer that the “devastation” is coming down but you look at the window and it’s a clear day!!  Who are you going to believe – the prediction from the experts or your own two eyes?

Well – remember in mid-2019 – there was “internet talk” claiming that U.S. fundraising in 2018 dropped $54 billion as a result of Trump’s 2018 Tax Plan?  Imagine the devastation such a drop (18% of individual giving) would cause the U.S. nonprofit scene.

Yet, even before Giving USA came out with their final 2018 fundraising numbers that summer, it was clear that the sky was clear!!  Storm cancelled. Nonprofits had a good year in 2018 (slightly off from the prior year but NOT a $54 billion drop).

Take a look at this chart based on Giving USA 2020 data – individual giving in 2018 did go down 2.23% from 2017 to 2018.  (I don’t believe in using inflation adjusted numbers within less than 3 years).

So, where did the $54 billion drop in fundraising hoax come from?

Well, it started with some politics entering the conversation.  The 2018 Tax Plan – the Trump Plan – was definitely going to drop the number of itemizers by a lot (not necessarily a bad thing but potentially a problem for nonprofits since once someone is no longer an itemizer, they technically no longer receive tax benefits for charitable giving besides the 2020 $300 non-itemizer deduction or IRA rollover gifts).  There were many in the media looking to attack Trump in any way possible – and this accusation was just another one that didn’t hold water.

What is incredible to me is that the worry of what would the drop in itemizers do to fundraising was a legitimate concern (even though 70% of tax filers were already non-itemizers).  But, once 2018 closed, it was seriously disingenuous for anyone to start claiming a massive drop in fundraising when the year was over already and it was clear already that nonprofits did fine.

So, how many itemizers were left after 2018 tax plan?

Take a look at this chart:

You will see that the percentage of itemizers in the U.S. dropped from 30% of filers in 2017 to 11.4% of filers in 2018.  That is a humongous drop – the number of itemizers in 2017 was 46,852,675 while in 2018 it was 17,532,592 (THAT IS A DROP OF 29,320,083 ITEMIZERS IN ONE YEAR!).

Yet, GIVING USA and all other fundraising measurements tell us that it didn’t make much of a difference (and, the fact that 2019 was back on an upward slope tells us that people are giving, regardless of being itemizers!)

Where did the silly headlines come from?  Well, one reporter looked at interim tax return data (middle of 2019) and saw that the chart showed that there was $54 billion less in claimed charitable deduction giving in 2018.  Problem with that stat was that many of the big givers had not filed their 2018 tax returns yet!  (many people take extensions until Nov. 15, particularly business owners).  Then, the geniuses of internet journalism picked up on the faulty story and tried turning it into a hurricane prediction (regardless of the fact that it was already clear that there had been no storm!).

So, there you have it – we now know that most Americans give to charity regardless of whether they itemize or not.  Of course, that remaining 11.4% of itemizers gave over 66% of the fundraising dollars in 2018!  SO, NEVER ADVOCATE FOR GETTING RID OF OR WATERING DOWN THE CHARITABLE DEDUCTION!

Anyway, if you enjoy looking at these types of data points, I recommend taking a look at my recent webinar:

Is the Great Wealth Transfer Finally Here?

The recording and PowerPoint are available for purchase – just click here!

 

Is the Great Wealth Transfer Finally Here? RECORDING

If you missed yesterday’s webinar “Is the Great Wealth Transfer Finally Here?”, you still have a chance to see the presentation and receive the full PowerPoint (over 50 data charts to use as you wish – nothing locked!).

CLICK HERE TO PURCHASE THE PRESENTATION RECORDING AND POWERPOINT HANDOUT!

This is my annual review of key data points for charitable giving, and planned giving in particular (includes over 50 charts and tables based on Giving USA, IRS, U.S. Census Bureau, CASE/VSE and more).

Since the 2018 tax law changes massively reduced the number of itemizers in America (and possibly their charitable contributions to boot), we have all been waiting to see what impact it really had (even though Giving USA numbers already suggest no negative impact on fundraising).

Well, now we can analyze the data to see what really happened as a result of Trump’s big tax plan!  And, maybe we can finally answer the age-old question of whether the charitable income tax deduction is that important for typical givers or not!

We will also look closely at trends in planned giving – based on these data sources – to see what ever happened to the Great Wealth Transfer predicted by Boston College professors in the mid-90s.

Video blog – Answer to Life Estate deduction question and more!

This is my first video blog!  I finally found the answer to the question of whether a donor of a life estate interest can elect to take a “cost basis” deduction (instead of a fair market value deduction) so that he/she can take a higher AGI ceiling limit.  The answer is not what I expected.  Check out this 20 minute video blog:

CLICK HERE TO JOIN TOMORROW’S “IS THE GREAT WEALTH TRANSFER FINALLY HERE” PRESENTATION (OVER 50 DATA SLIDES FROM THE VSE, GIVING USA, IRS, U.S. CENSUS BUREAU, AND MORE).