A new American Enterprise Institute (AEI) report, Charitable Giving and the Tax Cuts and Jobs Act , finds that the 2017 tax law will reduce charitable giving by $17.2 billion in 2018.
The AEI also measured the tax law’s effect on charitable giving even if there are modest boost in economic growth and found that charitable giving would still decrease by $16.3 billion this year alone.
These findings are consistent with a body of other research, including the 2017 study Independent Sector from Indiana University Lilly Family School of Philanthropy. The AEI study estimates may prompt 27 million taxpayers to switch from itemizers to claiming the standard deduction this year – effectively losing the tax incentive to give to charity.
We remain concerned about the tax bill passed last year will have negative effects for the charitable community’s ability to fulfill missions and serve communities. Independent Sector recently endorsed a bill in the House that will enable 100 percent of taxpayers the ability to claim the charitable deduction. Our 2017 research found that a universal charitable deduction would recoup lost giving and actually increase giving by $5 billion a year.