How the New Tax Law Impacts Individual Giving

"The Tax Cuts and Jobs Act of 2017 (TCJA) has added new urgency to the question of what is the future of charitable giving by individuals in the United States," states a post by Randy I. Cohen, of Americans for the Arts, and Patrick Rooney, of Indiana University Lilly Family School of Philanthropy.

The question of TCJA’s impact led Indiana University Lilly Family School of Philanthropy and Americans for the Arts to believe, according to Cohen and Rooney, that "it is clear there are troubling phenomena in motion that, without intervention, could bring the nonprofit arts sector to a critical tipping point."

Cohen and Rooney write:

Tax policy work is highly dependent on access to good data. Yet, one of the challenges is that the most robust research studies have data lags of 2-3 years (time needed for data collection, analysis, and publication). Waiting until 2022 for game-changing data is simply too long to wait.

To address the issue, the post explains Lilly Family School of Philanthropy and Americans for the Arts have designed a research solution, "built around a national panel study of 2,000 nonprofit organizations representing the full range of size, subsectors, and geographic regions," that seeks to bring reliable data within a year of deployment.

Cohen and Rooney explain:

We will track key fundraising metrics and pair those with a qualitative on-the-ground perspective about shifts in contributions by individuals, changes in demand for services, and the ability to meet that demand. In other words: Real people at real organizations telling real stories about the impact of the tax law changes.

It is expected this work will begin in 2020: "When the evidence about the effects of TCJA on charitable contributions arrives more quickly, advocates and policy experts can begin working on solutions sooner," they add.

Read here the post.

Image: Steve Buissinne / Pixabay