1 in 10 Givers Would Eliminate Charitable Deductions

One-third want tax breaks limited

Influence Magazine on May 22, 2017

A new report from Grey Matter Research and Consulting indicates that many Americans who give charitably don’t feel so charitable when it comes to handing out tax deductions.

In recent years, politicians have floated the idea of scaling back or eliminating tax deductions for charitable giving. And while 50 percent of U.S. adults contributing to nonprofits say charitable donations should be fully deductible for itemized filers, 1 in 10 want to eliminate such tax breaks altogether. Another 32 percent say there should be limits (with 17 percent wanting to restrict deductions based on the total amount and 15 percent in favor of limiting deductions based on income). Seven percent are undecided on the issue.

Charitable deductions already have limits. By law, they can’t exceed 50 percent of a taxpayer’s adjusted gross income. High-income filers have reduced eligibility for deductions.

“My reason for giving is not a tax deduction, but I do appreciate the benefit.” — Doug Clay

Older donors responding to the survey were most likely to favor tax breaks, with 67 percent of those 65 and older saying contributions should be fully deductible (vs. 39 percent of donors under age 35). Older donors were also more likely to say eliminating deductions would decrease giving.

There was no difference between liberal and conservative donors. However, donors from across the political spectrum who contributed over $100 per year were more likely to support deductions.

Doug Clay, general treasurer for the Assemblies of God, says ministry support should not be dependent on tax benefits.

“My reason for giving is not a tax deduction, but I do appreciate the benefit,” Clay says. “For most people, taking away the tax deduction won’t affect their giving, because only about 30 percent itemize their taxes and get the benefit, according to the Tax Foundation.”

Nonetheless, Clay says eliminating deductions could affect the bottom line for churches and other nonprofits.

“It could impact people with a higher net worth who have disposable income and are looking for places to give their money away,” Clay says. “A tax deduction may help them decide to give it away as opposed to keeping it or spending it on themselves. Giving may decrease, but I’m not sure if it will be drastic. Certainly, our advantage over for-profit entities in appealing to the same donor will go away.”

Grey Matter is a research group serving nonprofit organizations.

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