Consider Tax Policy in Year-End Appeals

Bells are ringing, appeals are mailing, and emails are flying. Every year, the holiday season brings not just presents and parties, but the largest surge in charitable giving during the year.

According to Blackbaud Institute’s 2016 Charitable Giving Report, 17.7 percent of all charitable giving took place in December last year, with the share of online giving even larger at 21.8 percent. And the year-end push keeps amplifying through December: Network for Good reports that 11 percent of giving occurred in the last three days of the year in 2015.

This December, nonprofit organizations have more than just year-end giving trends to monitor.  With the passage of the Tax Cuts and Jobs Act, organizations should understand what changes will impact them next year and beyond.

According to the Tax Policy Center, changes to the standard deduction would reduce the number of taxpayers itemizing deductions from 46 million to 13 million, with an estimated loss of giving between $12 and $20 billion in 2018.  While there is debate about the size of loss, this tax bill will have an impact on future giving.

As we count down the days to 2018 and prepare our final pushes to donors, consider making a modification to your traditional year-end solicitation. Add a sentence notifying your donors of the change and encourage them to take advantage of the charitable deduction while they still can. If your primary tool for year-end fundraising is mail, it might be too late to adjust your solicitation, but this also could be the perfect opportunity to dip your toes into an online campaign. By taking advantage of the added urgency for donations this year, you may be able to end 2017 with an added boost to help you hit the ground running in 2018, whatever tax reform brings.

The Association of International Certified Professional Accountants has a number of resources on fundraising, including crowdsourcing, gift acceptance policies, and acknowledgment letters that you might find helpful.

Carolyn Mollen is the chief financial officer at Independent Sector. 

Types: Blog, Policy Update
Global Topics: Nonprofit Capital, Public Policy
Policy Issues: Charitable Deduction, Charitable Giving, Tax Reform