KANSAS CITY, Mo. — It’s Giving Tuesday, but a new tax law that went into effect a year ago may impact those who donate in hopes of getting a tax write-off.
“Will that impact the way they give?” asked Debbie Wilkerson, president and CEO of the Greater KC Community Foundation.
That’s what some organizations were wondering after the 2017 Tax Cuts and Job Act went into effect in 2018.
Wilkerson said the new tax law doubled the standard deduction. Before 2017, the deduction for a married couple filing jointly was a little more than $12,000. Then it jumped to $24,000.
“And what people worried about is, ‘Well, goodness, that means that people aren’t going to be thinking about the charitable deduction as much,’ which is part of your overall deduction,” Wilkerson said.
Nonprofits in Kansas and Missouri said it’s too soon to tell whether or not the new tax law had a negative effect on donations.
“We can’t speak definitely to that until the year-end gifts come through, but it’s definitely a concern, anything that would impede donations,” said Randee Crumwiede, regional philanthropy office with the American Red Cross, “because the bottom line is the need doesn’t go away regardless of whether they’re higher or lower.”
Market Watch cites IRS statistics, which say less money was “gifted” in 2018 than in 2017.
“Raising that standard deduction is what changed the impact on the charitable deduction,” Wilkerson said.
She said some of their donors have adjusted to the law by bunching contributions into “donor advise funds.”
“They’re taking advantage of a larger charitable deduction in one year, say for example $40,000 worth of charitable deduction in one year, get well above that standard deduction, and then just give that out over the next few years,” Wilkerson said.
Organizations like the Red Cross that run on donations are grateful for those who keep giving so they’re able to provide vital assistance.
“We deliver care and comfort to people in their greatest hour of need, over and over and over again,” Crumwiede said.