The Associated Press reported earlier this week that American charitable giving dropped 2% last year, according to the Giving USA Foundation. This was only the second time in the history of the Foundation’s survey that overall charitable giving had decreased; the last time was 1987, the same year as the “Black Monday” stock market drop.
The total amount of charitable giving in 2008 was $307.65 billion, according to the report, down from a record $314 billion in 2007. While a drop in giving is rare, experts at the Foundation were surprised it was not worse due to the extremely unsettled economy.
“We definitely did see belt-tightening,” said Del Martin, chair of the Giving USA Foundation. “This drop in giving meant that nonprofits have had to do more with less over the past year, but it could have been a lot worse.”
The story comes as Congress and the Obama administration are considering ideas to pay for a series of agenda items, including health care reform. In his fiscal year 2010 budget, President Obama proposed reducing the charitable tax deduction for families making over $250,000 a year from the current 33% rate to 28%. However, the Indiana University Center on Philanthropy has estimated that reducing the tax deduction could cost charitable organizations billions of dollars in the current economy. Using tax forms from 2006 and applying the changed tax rate, the center found that giving by families making over $250,000 would have decreased 4.6%. This data and the new Giving USA Foundation survey may make the deduction rate change a political pitfall.
Should Congress reduce the charitable tax deduction for families making above $250,000 or will this hurt the charitable sector?
Quick Hits
Maryland nonprofits and associations working together to improve the economy (from Tom Hood, CPA)… New House health care time line and is the soda tax a non-starter?… Washington Post’s Ezra Klein interviews Senator Conrad on his co-ops plan… Centrist House Democrats struggle over public option.
