Donations to charities dropped by 1.7 percent last year after inflation, according to a report released this week by Giving USA.
While corporate and foundation donations increased overall, giving by individuals dropped 3.4 percent last year. The overall decrease is the first drop in charitable giving in the U.S. since the Great Recession, the report said.
Many charities warned that individual giving would decline as a result of the 2017 tax law that stopped millions of Americans from qualifying for the charitable tax deduction. The Tax Cuts and Jobs Act doubled the standard deduction to $24,000 for a couple, drastically reducing the number of households that itemized deductions. More than 45 million households itemized deductions on their tax returns in 2016, while that number is estimated to have dropped to approximately 16 to 20 million households in 2018.
“About half of all Americans give, and the tax policy changes may have created uncertainty for some donors, especially those who previously itemized but no longer will,” said Una Osili, Ph.D., associate dean for research and international programs at the Lilly Family School of Philanthropy. “We have strong historical data about the link between economic variables, the stock market and charitable giving, and we will be analyzing data for the next few years to better understand how broad giving patterns may have changed.”