Is the new US tax law killing philanthropy?

Some people think so. But the evidence is scarce.

The change in the tax law (which took effect in 2018) that matters to us is that the standard deduction is much higher than before. That means fewer people itemize their deductions, thus those whose donations to charity specifically lower their tax bill is lower.

Here’s an interesting post on the Douglas Shaw & Associates Blog, outlining a direct mail test done at the end of last year that explores whether or not the tax law has killed philanthropy: Does tax-deductibility really motivate giving?

The test had two versions of a year-end appeal:

  1. The letter referenced a year-end deadline.
  2. The idea of a “tax-deductible” gift was included.

Result: A tie. Both versions got about the same results. Average gift was lower (though not to a statistically significant level) for the “tax-deductible” version. Their conclusion:

The act of giving is an emotional response, and particularly in taking action in response to an appeal — where the main competition is … simply doing nothing. Reminding the reader of tax deductibility may actually get in the way of their generous response.

A lot of experienced fundraisers find this not surprising at all. Tax deductibility was not an important motivation for most donations before the change. Why would it be now? Before, about 30% of tax-payers itemized their deductions. Now it’s around 10%.

So all that fundraising that happens in December — including the super-busy last few days of the year online — wasn’t quite logical for most donors before, and it still isn’t.

  • Giving is done mainly for altruistic and emotional reasons. Same as ever. The tax advantage is (as before) important to few donors.
  • The December 31 deadline is a bit less meaningful than it was before, but it never was all that meaningful. Still, it had (and has) a lot of impact on giving!

My conclusion: Carry on. December fundraising is unlikely to change much for most of us. But keep your eyes open for signs to change!


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The future of fundraising is not about social media, online video, or SEM. It’s not about any technology, medium, or technique. It’s about donors. If you need to raise funds from donors, you need to study them, respect them, and build everything you do around them. And the future? It’s already here. More.

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Jeff BrooksJeff Brooks has been serving the nonprofit community for more than 35 years and blogging about it since 2005. He considers fundraising the most noble of pursuits and hopes you’ll join him in that opinion. You can reach him at jeff [at] jeff-brooks [dot] com. More.


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The future of fundraising is not about social media, online video, or SEM. It’s not about any technology, medium, or technique. It’s about donors. If you need to raise funds from donors, you need to study them, respect them, and build everything you do around them. And the future? It’s already here. More.

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Jeff Brooks has been serving the nonprofit community for more than 30 years and blogging about it since 2005. He considers fundraising the most noble of pursuits and hopes you’ll join him in that opinion. You can reach him at jeff [at] jeff-brooks [dot] com.

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