MNN CEO on Drop in Charitable Giving: Bad News – And a Warning Signal

The report, “Giving USA 2019: The Annual Report on Philanthropy for the Year 2018” issued today by Giving USA, found that charitable giving decreased by 1.7% and that individual giving decreased by $10.4 billion nationwide in 2018. The Massachusetts Nonprofit Network (MNN) released the following statement from CEO Jim Klocke:

“This is bad news for the people served by nonprofits–and a warning signal about the end of 2019.

When the economy grows, giving should increase, and it usually does. But not in 2018.

As MNN’s Commonwealth Insights reports have outlined, the 2017 federal tax bill raised the cost of giving by 28% for tens of millions of people across the country. When the cost of something goes up by 28%, there will be an impact. Today’s Giving USA report documents the impact–a drop in individual contributions of over $10 billion nationwide in 2018. That drop will have real effects for the people served by nonprofits and the communities they live in, including here in Massachusetts.

Today’s news is a warning signal because not everyone affected by the federal tax bill realized it when they made their 2018 contributions. They do now: many learned that they lost the giving deduction this past spring. The question is now what happens to 2019 individual contributions. There is a real risk that they will drop again, and by even more than $10 billion.

What should we do? First, we should restore the charitable contributions tax deduction for the millions who lost it in 2018. Second, we must make it available to everyone. We should also encourage donors to increase their giving this year, so that the 2018 drop becomes an aberration. MNN is committed to pursuing these strategies that will support the strength, viability, and sustainability of the nonprofit sector.

The people served by nonprofits, and the communities they live in, deserve no less.”

Previous editions of MNN’s Commonwealth Insights reports have explored the potential impact of the 2017 federal tax bill on Massachusetts nonprofits. Click here to download, “From Challenges to Opportunities: How Nonprofits Can Make Sense of the New Tax Law” (2018). Click here to download, “Tax Reform: Up to $513 Million of Massachusetts Donations at Risk” (2017).