Predictions that changes to federal tax laws would discourage people from making charitable donations so far appear to be off the mark, local and national charities report.
“Our traffic is up and, in fact, donations through our website are up,” said Larry Lieberman, chief operating officer of Charity Navigator.
The New Jersey-based nonprofit evaluates charities and serves as a watchdog for those organizations. Donors use Charity Navigator's rating site to check out groups before donating.
About 11 million people each year use CharityNavigator.org to check its ratings and link directly to groups to make contributions, Lieberman said. The average donation made through the site in the first quarter of 2017 was $82. So far this year, that figure is up to $91, he said.
“It's absolutely an affirmation that generosity, compassion and philanthropy are not driven by tax refunds,” Lieberman said.
The bulk of donations, however, are made between Christmas and New Year's Eve. So it could be that the impact of the tax changes that took effect this year hasn't kicked in yet, he said.
The Tax Cuts and Jobs Act — pushed by President Trump and passed solely by Republicans in Congress — potentially affects charitable contributions in several ways. Most significantly, it nearly doubles the standard deduction while eliminating a $4,050 personal exemption. Income excluded from taxes will increase by about 15 percent as a result.
A taxpayer filing under single status would see income exclusions go from $10,400 in 2017 to $12,000 in 2018. A married couple filing jointly would see income exclusions go from $20,800 to $24,000.
The amount of deductions needed to make itemizing worthwhile increases from $6,350 to $12,000 for a single person and from $12,700 to $24,000 for a married couple filing jointly. The law also eliminates or caps several types of itemized deductions, making it harder for people to cross the threshold.
Nationally, about 16 million households are expected to file itemized deductions for charitable gifts in 2018, which is 21 million fewer than under the old law, according to estimates from the Tax Policy Center. The group predicted charitable giving overall could drop by between $12 billion and $20 billion this year.
In December, the United Way of Southwestern Pennsylvania and the Pittsburgh Foundation predicted that the new tax law could cause a 5 percent drop in donations locally. That would amount to about $60 million in this region, which saw about $1.2 billion in charitable contributions in 2015, the most recent figures available at the time.
Even four months in under the new law, it is too early to tell what its overall effect will be on donations, said Bob Nelkin, CEO of United Way of Southwestern Pennsylvania, which covers Allegheny and Westmoreland as well as Butler, Fayette and southern Armstrong counties.
Donations at the St. Vincent de Paul thrift store in Greensburg haven't slowed, said Fred Francese, store president of the South Main Street location.
The main floor's 5,000 square feet is packed with shoes, clothing, housewares and other items. An equal-sized downstairs showroom is packed with furniture, electronics and sporting goods. And another 5,000 square feet of merchandise is tagged and ready to display as soon as space opens up, Francese said.
“Without even soliciting, we have plenty coming to the store,” he said.
Many people who donate clothes and other items leave with receipts they can use to itemize their taxes, though few ask for one or take one when offered, he said.
“They are not coming for that,” Francese said.
Most nonprofits get the bulk of contributions in small amounts, said Peggy Outon, executive director of the Bayer Center for Nonprofit Management at Robert Morris University.
Many of those donations come from people who don't itemize — and even those who generally don't rely on their charitable contributions to meet the requirements to itemize, she said.
The main effect of the new tax structure would be on higher-income taxpayers who donate thousands of dollars or more as part of a financial strategy, she said.
“There's no doubt that this tax law is going to have a major effect on major donors,” Outon said.
For everyone else, the deduction is of less interest than the efficiency and effectiveness of the charity, she said.
“All of the rest of us tend to support nonprofits because of their cause, not because of the tax law,” Outon said.
Brian Bowling is a Tribune-Review staff writer. Reach him at 724-850-1218, bbowling@tribweb.com or via Twitter @TribBrian.
