10% of Wealthy Donors Will Increase Giving Under the New Tax Rules, Study Finds

Title: “Tax Reform and Donor Attitudes”

Organization: Marts & Lundy

Summary: More than a year after the new federal tax law went into effect, many donors remain unsure about what impact the changes will have on their charitable giving, according to the report, which was based on interviews with 105 wealthy people and an online survey of more than 2,500 donors of all income levels.

Only 10 percent of the affluent donors plan to increase giving as a result of the new tax rules, the report says. Fifty-three percent said they expect their philanthropic giving to remain the same, despite changes in the tax code that reduce incentives for itemized charitable deductions. But 37 percent said they don’t know yet what impact the changes will have on their giving.

Though the data doesn’t reveal why more people whose taxes have been cut are not digging deeper, interviews with donors suggest some key factors, says Phil Hills, president of Marts & Lundy, the fundraising consulting company that conducted the study: continuing uncertainty about the impact of the new tax code and the economic outlook (including the future of international trade).

Data for the study came from 105 interviews conducted as part of feasibility studies on behalf of nonprofits planning campaigns. An additional 2,542 online survey responses came from other donors to the company’s clients. Among the findings:

• The people who responded to online surveys, a group composed of more than just wealthy donors, were more likely than the interviewees to be uncertain about the impact of the tax code on their future giving. About 45 percent said they didn’t know what the effect would be; 39 percent said their giving will remain the same.
• People who give less than $5,000 to charity annually were most likely to express uncertainty about whether their giving would change: 44 percent said they didn’t know.
• However, those smaller donors were slightly more likely than others to say they planned to increase donations. Fourteen percent said so, compared with 11 percent of online survey takers who gave $5,000 or more annually and only 10 percent of the affluent donors interviewed for feasibility studies.