Study: Americans cutting their donation budget

Written on Oct 10, 2017

Fewer Americans are making room in their budgets for charity, and nonprofits are increasingly relying on the affluent for support, according to a new study by The Chronicle of Philanthropy.

Only 24% of taxpayers reported on their tax returns that they made a charitable gift in 2015, according to the analysis of IRS data. A decade earlier that figure routinely reached 30 or 31%.

With fewer Americans giving to charity, nonprofits are increasingly leaning on the wealthy for support. Three-quarters of all itemized donations in 2015 were from taxpayers who earned $100,000 or more; those earning $200,000 or more accounted for more than half.

Economists caution that the number of people who itemize their taxes and report charitable giving can vary for many reasons; Americans in the past decade have taken fewer deductions of any kind.

But The Chronicle analysis is in line with other studies that indicate fewer Americans are making donations. Indiana University’s Lilly Family School of Philanthropy estimates that the share of households contributing to charity has dropped from 67% in 2004 to 59% in 2012, the latest year for which figures are available.

Texas A&M found a similar drop in giving in its research, saying the recession may have broken the habit of giving for some Americans.

The decline in itemized giving could accelerate under the tax plan put forward recently by the Trump administration and congressional leaders. That plan roughly would double the standard deduction, meaning millions fewer taxpayers would itemize their tax returns. Researchers earlier suggested that Trump tax proposals could reduce charitable giving by $13 billion.

Also, the Trump administration and Congress are weighing significant spending cuts that could affect nonprofits and increase demand for their services at the same time.

Other demographic and cultural shifts also may be contributing to the decline. Millennials have overtaken boomers as the country’s largest generation, and studies widely indicate they aren’t embracing traditional ideas of giving.

Also, people are increasingly busy and bombarded with information and requests for help. A 2014 report on a YMCA survey concluded America was suffering from "engagement fatigue" when the results showed double-digit declines in both charitable giving and volunteerism since 2010.

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