Charitable Giving and the TCJA

For many of us in ministry, fall signals the beginning of the church programming year and focus on stewardship with our congregations. 

Now that the first filing season under the new Tax Cuts and Jobs Act is behind us, how did your church or non-profit fare in charitable giving numbers in 2018? New data released by the IRS through July 25, 2019 shows that taxpayers gave over $57 billion less to charity in 2018. (https://www.irs.gov/statistics/filing-season-statistics)

‘It’s a big drop in dollars, but those numbers don’t tell the whole story. Just because someone isn’t itemizing anymore doesn’t mean they aren’t still giving.’— Rick Cohen, National Council of Nonprofits

The TCJA doubled the standard deduction for most taxpayers in 2018. That dramatically reduced the number taxpayers who were able to itemize deductions. Stats show that only 10% of 2018 returns filed so far contained Sch A, compared to 30% in 2017.

There’s more to the story, too. The IRS expected a record 14.6 million extensions for 2018. All of the stats will not be in until after the due date on Oct 15. Most extensions tend to be filed by high-income taxpayers who typically itemize and have hefty charitable giving deductions. Other factors can come into play to incentivize givers, such as a strong economy and greater disposable income. Giving also spikes after tragic events and natural disasters.

So, how did your church or non-profit’s donation receipts look in 2018? It may be too early to tell, but hopefully the trends will show that tax laws have little impact on giving, and that giving remains strong by individuals who want to make a difference in their church and communities.