(This is a bit of a longer blog than usual, but there's a lot to share with you! To our Canadian and other members, please know I’ll be focusing on other countries and public policy later in the year).
It’s a bit of a new world for fundraisers in the U.S. after the passage of the tax reform bill.
The bill, and its doubling of the standard deduction, could bring about major changes in giving patterns by mid-level donors and an overall drop in giving—tens of billions of dollars. It may also mean new opportunities in major and corporate giving.
We know that many of you are concerned about the implications. AFP has already provided some guidance here and here, and I promise we’ll be here to help you throughout the year, offering tips and lessons learned as we explore this new giving environment.
Of course, the final bill wasn’t what we wanted, even with the Johnson Amendment ultimately being retained (which keeps the prohibition on charities from getting directly involved in partisan politics). We believe a universal charitable deduction is needed to offset the anticipated drop in giving we’ll see in 2018 as a result of the tax bill. We’ll continue to fight for that provision over the next 12 months and beyond, just as we’ve fought during the past year.
AFP was incredibly active on the tax reform front, both individually and as chair of the Charitable Giving Coalition (CGC). The CGC is composed of over 200 nonprofit organizations, associations and related groups, including Independent Sector, CASE, AHP, Council on Foundations, the National Council of Nonprofits, United Way, YMCA, etc. You can check out the CGC website to see what the coalition did over the past year—it’s a good source of public policy information along with AFP.
Along with all the groups in the CGC, we met with nearly every Member of Congress in 2017. We also met with academics and tax policy experts to discuss legislative proposals to encourage giving. During the last couple of weeks, we had hundreds of calls and meetings and emails with Congressional staff to create a universal charitable deduction amendment.
We were contacted by numerous media outlets (and were quoted in The Washington Post, Fast Company and The Nonprofit Times). We distributed several legislative alerts to members, like this one here, asking you to contact your Members of Congress, and your response was tremendous—thank you! We partnered with new champions, like Rep. Mark Walker (R-N.C.) and Senators James Lankford (R-Okla.), Debbie Stabenow (D-Mich.), and Ron Wyden (D-Ore.), and came close to getting the amendment inserted into the final bill.
But it didn’t happen. We did seem some positive change—an increase in the adjusted gross income (AGI) limitation for cash gifts to 60 percent and the elimination of the Pease Amendment that limited certain gifts—but the bottom line is, we, collectively, have a lot of work to do in 2018.
As a profession and as a sector, we need to catalogue what happens with giving this year. Congress needs to understand the ramifications of its legislative decisions. We’ll be working with you and your fellow members to gauge if and how giving changes over the next 12 months. We will also be developing communications so Congress can understand how the tax changes are affecting charities and the services we provide.
Throughout the year, we’ll continue to push the universal charitable deduction. We anticipate some legislative vehicles related to tax issues that should provide some openings for us. But we’ll be open to other ideas and incentives that may work to encourage giving as well.
People do not give because of tax policy. That is clear. But we know from research and history that tax incentives influence how much and how often donors give. Removing the incentive to give from approximately 30 million taxpayers by expanding the standard deduction likely will result in a significant drop in giving.
On the other hand, we need to realize that although tax policy has changed, the desire to give hasn’t. People still want to help each other and change the world. Major donors will still be able to take advantage of the charitable deduction, and small-gift supporters were likely giving without using the deduction. Our goal—to build relationships, create connections and inspire people to get involved—has not changed in the slightest.
Public policy can have an extraordinary impact—both good and bad—on the work we do and the impact of our organizations. AFP remains committed to advancing public policy that supports your fundraising, such as the universal charitable deduction and other giving incentives. We will keep you posted as we push important legislation forward and, with your action and assistance, we can persuade Congress to help our organizations better serve our communities.