With the tax filing deadline right around the corner, millions of Americans are tallying just how much of their hard-earned money will be handed over to the government. Over the last year, Philanthropy Roundtable has published valuable research and insights on how tax policy affects charitable giving. Overall, we have found that lower taxes on generous Americans not only make more dollars available for charitable giving, but actually result in more of those dollars getting in the hands of charitable groups serving our communities.
The number one issue the Roundtable is watching closely through our Federal Tax Initiative is the debate around extending President Trump’s tax cuts. The 2017 Tax Cuts and Jobs Act (TCJA) is set to expire at the end of the year, but right now, lawmakers are discussing behind closed doors which provisions they will extend and how to pay for them. These decisions will determine who gets to keep more money in their pockets – an issue that comes into sharp focus as Americans file their annual tax returns.
Philanthropy Roundtable’s research is a go-to resource for those interested in the impact that tax policy has on charitable giving. From individual rates to the standard deduction, here are some of our most insightful pieces on all things taxes:
Roundtable Research: Tax Cuts and Jobs Act, Expiring Provisions and Implications for Philanthropy
There is no shortage of provisions in TCJA that could chill giving if allowed to expire. Lower individual tax burdens allow Americans to keep more of what they earn, which they can give to charity. Ultimately, higher taxes will mean more money for a bloated and inefficient government bureaucracy and less for the creative, nimble and effective charitable sector. For those who care deeply about our society and addressing the serious challenges we face, higher taxes are the wrong answer.
Roundtable Research: How Tax Policy Affects Charitable Giving
Philanthropy Roundtable evaluated data from 1975 to 2023 and discovered that for every $1 the U.S. Treasury forgoes in potential revenues, the charitable tax deduction results in $1.30 making its way to public charities. This reinforces the long-held consensus that tax incentives for charitable contributions promote giving. The research further shows that “for every 10 percent increase/decrease in income, a donor increases/decreases their charitable giving by 7 percent.” The takeaway is simple: If tax cuts are extended, it means more money in American wallets and more money for charitable giving, benefitting the vulnerable Americans and communities who depend on it.
Roundtable Policy Brief: Examining Proposed Changes for Nonprofits
Nonprofits in America are powered by private individuals voluntarily coming together to serve and strengthen communities – not enrich themselves. That is why nonprofits have a unique tax status – so that Americans can invest the fruits of their success not into the federal government, but into expanding and improving their work to maximize societal benefit. Proposals to change the tax treatment of nonprofits threaten the effectiveness of nonprofits to create opportunities and build stronger communities.
Through our Federal Tax Initiative, Philanthropy Roundtable is a leading voice in Washington working to ensure that Americans’ freedom to give to the communities and causes they are passionate about is protected. You can support our work here.
