Trump Tax Plan

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!


You maniacs! You blew it up! – The SECURE Act’s “anti-abuse” rule

Image result for You blew it up! Ah, damn you! God damn you all to hell!Am I the only one not happy about the SECURE Act’s so-called anti-abuse rule?  Read this post carefully and I think you will be unpleasantly surprised.

I gave a webinar on the SECURE Act almost two months ago but I wasn’t sure how exactly the anti double-dipping rule worked (for those who make tax-deductible additions to their IRAs past age 70 1/2 and then attempt to make an IRA rollover gift to charity) – until today.  (I actually didn’t want to believe what people were saying)

Kudos to Bill Cass, CFP, CPWA, Director of Wealth Management Programs at Putnam Investments – his article on the topic seemed to be very clear and authoritative, and he actually responded to my request to pin-point the language in the statute.

It was actually right in front of my face – right in the section repealing the maximum age for traditional IRA contributions (section 107 of the SECURE Act).  The language is quoted verbatim below – read it and see how fast you can decipher it.


There is a serious penalty waiting anyone who takes advantage of their new ability to make additions to IRAs past age 70 1/2 and then subsequently use the IRA rollover giving provision (Qualified Charitable Distributions – QCDs).

For every dollar you add to your IRA past age 70 1/2, the IRS will remove the QCD tax shield for later QCDs.  This means, that if you decide to add the maximum amount to your IRA when you are let’s say 72 (assuming you have earned income to justify it) – that would be $7,000 for someone age 60+ – then at anytime from that point forward if you decide to make a QCD, the first $7,000 of your QCD will be disqualified from tax-free treatment.  Let’s say you did a QCD for $10,000 at age 73 after having added $7,000 to your IRA in the previous year.  In that tax year (age 73), $7,000 of your IRA rollover gift will be reported as a taxable withdrawal and the remaining $3,000 will still be a tax-free distribution.  Of course, you will be able to take a $7,000 deduction on your federal income tax return if you itemize but don’t forget, the 2018 tax plan changes left us with probably less than 10% of taxpayers as itemizers.

Here is another way to look at it.  Let’s say you decide to continue working until age 75 and continue adding the maximum of $7,000 a year to your IRA – 4 1/2 years of IRA contributions totaling $31,500 in post age 70 1/2 IRA contributions.  For the rest of your life (that’s right, it’s a lifetime penalty), if you decide to start making QCDs, the first $31,500 would be treated as taxable distributions (that you could still deduct if you are an itemizer).  My guess is that you would decide NOT to make any QCDs at that point.


At a minimum, you need to add a caveat to your IRA giving materials – an asterisk mentioning that if you make any additions to your IRA past age 70.5 and then want make a QCD, you should consult with your tax advisor.


Meaning, how many people will want to and be able to add to their IRAs past age 70.5?  I actually think a lot.  Firstly, Baby Boomers are generally working well into their 70s (Trump, Biden, Sanders to name a few) – so plenty of people will have earned income past age 70.5.  And, it is actually a great planning idea!  I asked my dad (who is 83 and currently working for the Census) if he might add to his IRA – he said yes!

And, if a donor has added anything to their IRA past age 70.5, they better be warned before making a QCD!


I actually think the nonprofit world should lobby to get this fixed.  If this is so-called double-dipping, then all IRA Rollover giving is double dipping!  All IRA contributions, whether made directly or via rollover from a 401K or other plan, were above the line deductions!  Yet, QCDs are allowed. Now you are only going after the post 70.5 additions (sounds like age discrimination to me)?  It doesn’t make sense to me, and it creates a very complicated issue for nonprofits and donors.

Here is the text of the law – read it and see if you can made sense of what it is saying…..

Sec. 107. Repeal of maximum age for traditional IRA contributions

(a) In general
Paragraph (1) of section 219(d) of the Internal Revenue Code of 1986 is repealed.

(b) Coordination with qualified charitable distributions

Add at the end of section 408(d)(8)(A) of such Code the following:

The amount of distributions not includible in gross income by reason of the preceding sentence for a taxable year (determined without regard to this sentence) shall be reduced (but not below zero) by an amount equal to the excess of—

(i) the aggregate amount of deductions allowed to the taxpayer under section 219 for all taxable years ending on or after the date the taxpayer attains age 70½, over
(ii) the aggregate amount of reductions under this sentence for all taxable years preceding the current taxable year.

Planned Giving for High Net Wealth Prospects

If you have ever worked with (as an adviser, fundraiser, or whatever) a high net wealth family (tens of millions and up), you’ll know this is different territory than even your regular major gift donor.

For the past 13 years, in addition to being a Planned Giving consultant, I’ve moonlighted as a Trusts & Estates attorney/go-fer for a high net wealth family.  This work initially was sporadic but as the windfalls started exceeding the billion dollar mark (and the wealth transfers in the hundreds of millions), this client has essentially become a job.
With all of my exposure to the highest net wealth family planning issues, the schemes from planners/promoters being pitched, and witnessing first hand what works and what doesn’t, I have decided to share this insider view in my newest webinar: Planned Giving for High Net Wealth Prospects (this Wednesday at 12 NOON EASTERN).
Our goal for this session is to help you start developing a successful approach to presenting Planned Giving ideas to your wealthiest supporters.  But, don’t expect the same old planned giving.

The Big Lie – Did the Trump tax plan cause a big decline in charitable giving?

I generally stay away from partisan politics but this issue has been bothering me for awhile – and now look at the outrageous – flat out LIE – in a silly article on (click here  or the picture to see it yourself).

The headline: Trump Tax Plan Leads to $54 Billion Decline in Charitable Giving

The article goes on to quote Giving USA, saying that there was “a 1.7 percent decline in overall giving to charity organizations last year and a 1.1 percent decline in dollars from individual Americans given, or a 3.4 percent decline when adjusted for inflation. This represents the first drop in individual giving since 2013. In 2017, giving increased by 5.7 percent.”

Ok – here is what Giving USA actually reported:

Total fundraising from all sources – 2017 was $435.11 billion, 2018 was $427.71 billion.  Do the math – Giving USA is saying the drop was $7.4 billion.  The article never explains where it gets its insane headline that the drop was $54 billion. THESE HAPPEN TO BE INFLATION ADJUSTED #s BY THE WAY.

So, if you look at the giving in NON-INFLATION ADJUSTED terms (i.e. regular dollars), you will find in Giving USA that 2018 had the highest giving total ever! 2017 came in at $424.74 billion and 2018 came in at $427.71 billion.  That is an increase of $2.97 billion in total giving from 2017 to 2018!  Not a decrease of $54 billion!

Anyway, I am close to finishing a new presentation looking at all of the fundraising numbers, and focusing on the impact of the increase in non-itemizers due to the 2018 tax plan.  So far, it certainly doesn’t seem to have had much of an impact if actual fundraising numbers increased in 2018!