Despite donor numbers being down, charities continue to see larger monetary donations
DURHAM, N.C. (WTVD) -- There are just a couple more days to make charitable gifts before the end of the tax year, but that might not be enough incentive to give anymore.
Though the data is still limited, economists are starting to measure the effects of the dramatic changes to tax laws brought on by the implantation of the Tax Cuts and Jobs Act of 2017. The law, passed by Republicans and signed by President Donald Trump, doubled the standard deduction for most American families from $12,700 to $24,000, among many, many other changes.
"I believe there are two schools of thought -- there's a school of thought of scarcity and a school of thought of abundance" Oie Osterkamp, Executive Director of the Ronald McDonald House of Durham & Wake, told ABC11 in December 2018. "It's going to be really interesting to see how much of that philanthropic feeling pushes them to give or if they going to go, 'Since I can't deduct it anymore, I might not do it.'"
One year later, the receipts are in, and Osterkamp is thrilled to boast about Ronald McDonald House's "abundance:" 6 percent growth in annual giving and 3 percent growth in the number of gifts between July and December 2018. Overall for the 2018 calendar year, annual giving was up 17.1 percent.
"It's humankind at its best," Osterkamp asserts to ABC11. "People who support something from their heart find out, like we all do with any gift, the giver gets tenfold what they try to give somebody else."
By itself, Ronald McDonald House's success is a positive development, but national data collected by a variety of entities appear to show a mixed bag of success.
In its 2018 Annual Report, Giving USA calls 2018 a "complex year" for charitable giving, concluding that individual giving fell by 1.1 percent, from $295 billion in 2017 to $292 billion last year - ended a four-year streak of increases. Last year's individual giving also proved to be the largest decline since 2009, and the economic conditions couldn't be starker.
At the same time, however, Giving USA reports corporate giving and donations through foundations were up significantly, making up for the drop in individual gifts and pushing overall giving into a net positive.
Research from the Fundraising Effectiveness Project offers similar pictures: Major Donors ($1000 and up) increased 2.6 percent year over year, but Mid-Level donors ($250-999) and General Donors (under $250) decreased by 4.0 percent and 4.4 percent, respectively.
"All it takes is a few $100 million gifts and that makes up for a lot of reduction at the middle," Charles Clotfelter, Professor of Public Policy Studies at Duke University, explains to ABC11. "I think the religious organizations and the local charities are the ones they depend on are not super affluent givers. Those are the organizations that are going to struggle in this new environment."
The new environment could also change quickly if the economy takes a turn for the worse.
"It can turn pretty quickly as we saw in 2008," Clotfelter said. "In 2008 the bottom fell out of the market, everyone got scared, people's houses were suddenly worth less than they thought they were and we're still probably lingering in the shadow of that Great Recession."
