The Fundraising Effectiveness Project released their second quarter analysis of fundraising returns for over 13,000 organizations, and the numbers paint a bleak picture. The research shows a 2 percent decline in the amount given and close to a 7 percent drop in the number of donors. This trend is a continuation of declines seen in the first quarter of 2018. Unfortunately, the nonprofit sector saw this coming.
Sometimes, you don’t want to be right. In 2017, Independent Sector advocated to expand charitable giving incentives to all taxpayers, because experts projected the Tax Cuts and Jobs Act would cause giving to drop by $11-20 billion.
At the time, legislators ignored the data and passed the bill without expanded giving incentives. They said economic growth would guard against declines in giving.
The findings from the Fundraising Effectiveness Project are consistent with the results Independent Sector found when we polled people to ask how their giving may change this year. Higher-income donors are projected to reduce the amount they give, while low- and middle-income donors may stop donating altogether. Combined, these early results corroborate with other research that projected a decline, ranging from American Enterprise Institute to Indiana University.
We have evidence that giving is being negatively impacted, so now it’s time to act. We already have a solution to this problem. Expanding the charitable deduction to all taxpayers can recoup giving lost due to tax code changes in 2017, and potentially increase giving across all income levels. Armed with this new data, now is the time contact your member of Congress to ask them to sign on as a cosponsor to the Charitable Giving Tax Deduction Act, H.R. 5771.
We foresaw the disappointing results, and still no reasonable measures were taken to avoid them. This new data, however, presents an opportunity to advocate even more for the best solution for our sector and the communities we serve.