In a follow-up to this weekend’s post about the WSJ article touting the accelerating of charitable gifts as a result of the fiscal cliff, here is the latest:
Despite the WSJ article, I am not seeing in the media or hearing from clients/colleagues much about windfalls for nonprofits this year-end. On a client conference call yesterday, we had almost complete silence when I polled the group as to whether anyone had seen donors scrambling to accelerate their giving before the fiscal cliff. One client did mention a nice year-end cash gift that was coming possibly as an indirect result of the fiscal cliff – the donor had liquidated capital gains property during the year and wanted to increase year-end giving to offset capital gains. If the donor had sold the property because of the impending capital gain rate increase, you could say it was a fiscal cliff inspired gift.
Another interesting point is the impact of the impending fiscal cliff on dividend stocks. Apparently, many major corporations are accelerating their dividends to shareholders to occur during 2012, while the 15% rate still applies. Click here for a news piece on this issue. Nice going away present. Maybe the extra cash – earned at still low rates – will inspire some additional giving. Here is one more story from Bloomberg.com that goes into more about the special dividends being paid out in December (check out the video if you want to hear more about who will be impacted most by the dividend rate increase).
Lastly, nonprofits have to be watching nervously all this talk about capping of deductions. The closer we get to a compromise, the more I think it will involve some sort of toying around with deductions. Not just because it is an easy target (raises taxes without raising rates). The reason deductions are a target is that they are an easy way to make their numbers work. All of laws effecting government revenue go through various projections of future costs/revenues. Reducing the value of deductions is an easy way to make numbers work (not that anyone really checks if those projections ever come true).