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Financial Planning > Charitable Giving > Charitable Giving Deductions

Charitable Giving by Taxpayers Who Don’t Itemize Plunges

By Michael S. Fischer

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New research from United Way Worldwide, analyzing charitable giving trends in the U.S. over the past decade, finds a steady decrease in the share of taxpayers who donate to nonprofit groups, with the biggest decline coming among those who do not itemize tax deductions.

Between 2004 and 2014, the percentage of non-itemizers who give to charity dropped from 52% to 40%, while giving from itemizers fell from 88% to 82%.

Taxpayers who itemize gave more than twice as much to charity as those who did not: $3,504 on average versus $1,329.

The United Way Worldwide study included data on some 9,000 U.S. households from the University of Michigan, the Internal Revenue Service and The Chronicle of Philanthropy.

“The decline in the numbers of donors is already having a negative impact on the charitable sector,” Steve Taylor, United Way Worldwide’s counsel for public policy, said in a statement. “We believe the tax law will only accelerate this decline and hurt our most vulnerable communities who can least afford it.”

The Tax Policy Center estimated that the new tax law, which increased the standard deduction to $12,000 for individuals and $24,000 for couples, would cut the number of households claiming an itemized deduction for charitable donations from about 37 million to about 16 million in 2018. It would reduce the federal income tax subsidy for charitable giving from some $63 billion to about $42 billion.

Several changes in the tax legislation will influence giving by charitably minded individuals.

United Way noted in the statement that one of its top public policy priorities was to change the tax law to reinstate charitable giving deductions to prevent further decline in charitable donors.

Last month, Rep. Danny Davis, D-Ill., introduced a bill that would create a universal charitable deduction to allow all taxpayers — both those who itemize and those who do not — to deduct their charitable donations.

Michael S. Fischer

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