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November 10, 2016 at 09:56 AM
Nonprofits organizations could face serious cutbacks in federal support and a drop in charitable giving if President-elect Donald Trump’s policy proposals are adopted, according to a report by The Chronicle of Philanthropy.
A pre-election analysis by the Tax Policy Center estimated that Trump’s plan would reduce individual giving by 4.5% to 9%, or between $14 billion and $26 billion in 2017.
In 2015, American donors contributed an estimated $373 billion to charity, according to Giving USA.
Moreover, any near-term market declines could undermine donors’ confidence with negative consequences for year-end giving, Patrick Rooney, who teaches at Indiana University’s Lilly Family School of Philanthropy, told The Chronicle.
As well, if Trump should take action on campaign pledges to impose tariffs on imports and scrap trade agreements, that could disrupt the economy and hurt charitable giving, Rooney said.
According to The Chronicle, many analysts expect Trump and Capitol Hill lawmakers to propose a major tax overhaul, probably including big tax cuts. Some proposals may also seek to limit incentives for giving and spending cuts to social-service spending.
Trump’s tax plan seeks a cap for write-offs, including for charitable donations, of $100,000 for single people and $200,000 for married people, the Tax Policy Center said.
The Chronicle reported that Trump’s tax plan calls for 1% annual reductions in federal spending, excluding military and entitlement programs—some $800 billion over 10 years. In the event of passage, colleges, human-service groups and healthcare organizations, which typically receive government grants and contracts, could see reductions.
Together, social-service spending cuts and caps on deduction “would be disastrous” for nonprofits, said Steven Taylor, United Way Worldwide’s counsel for public policy.
