Charities vie for year-end donations
Amid tumult, some organizations worry how 2018 will shake out
If the year-end appeals for charitable donations seem especially urgent this year, cut your local nonprofit a little slack. Amid tax changes, a volatile stock market and record-breaking disasters, some organizations are nervous about how 2018 will shake out.
After a milestone 2017 — in which Americans crossed the $400 billion mark in charitable giving for the first time — analysts predicted a downturn this year. Under the Tax Cuts and Jobs Act, which nearly doubled the standard deduction that people can take on their federal returns, millions of middle-income Americans filing their 2018 returns will have no incentive to itemize deductions, and therefore no financial advantage in having made charitable deductions.
The damage was projected to be upwards of $13 billion, or about 3 percent to 5 percent. For smaller, regional charities, such as most of those in Central Florida, even that relatively small drop could hurt.
“We’re never sitting on an extra couple of hundred thousand dollars at any one time,” said Scott Billue, founder and president of Matthew’s Hope Ministries in west Orange County, which aids people who are homeless or living in poverty. “This year, we went out and got a line of credit for the first time, and we used it, because we found ourselves on the tipping point day to day.”
The faith-based nonprofit built out a new 7,000-square-foot facility for its food pantry, clothing and hygiene supply bank, a carpentry workshop and nurse’s office, and it began work on a daycare center and mental health clinic. But for much of the year, donations lagged.
“I think the tax law was the
reason — although I can’t prove it,” Billue said. “Fortunately things improved in the last few months, despite the stock market. I can’t really explain it.”
The donations themselves aren’t generally larger, he said, but there are more of them.
The same has been true at United Against Poverty in Orlando, which offers lowincome residents job training and financial-stability programs amid a range of services.
“After a lot of uncertainty, we ended up having a really good year,” said executive director Eric Gray. “The plan was to raise $1.3 million, and we did about $1.7 million. But I do think all of us are going to have to adjust how we ask for donations, because the tax advantage is just not as compelling as it used to be.”
While most donors list the tax incentive fairly low on their reasons for giving, it can certainly influence the timing and amount of contributions. More than 40 percent of charitable giving comes in the final six weeks of the year, with 10 percent coming in the final 48 hours, said Gray, who teaches on the subject at the University of Central Florida.
And this year, especially, decisions may be made in the final 24 hours.
“The stock market volatility we’ve seen this month has left a lot of people nervous,” said Mark Brewer, president and CEO of the Central Florida Foundation, home to more than 400 charitable funds by and for the community. “We’re not going to know until the very end how everything shakes out. I think you’re going to have a lot of CPAs and financial advisers making lastminute calls.”
The market freefall on Christmas Eve left many rethinking their charitable giving strategies for the year, Brewer noted, although post-Christmas rebounds may have eased fears. And some donors — especially larger ones who give stock or real estate — may have already made those decisions before the worst of the market’s roller coaster ride.
At JFS Orlando — formerly Jewish Family Services — interim executive director Mike McKee, a certified financial planner, might be expected to be as queasy as anyone about the charity sector’s financial health. But while donations were largely flat in 2018, McKee is optimistic.
“I think there’s an awful lot that we can do that’s never been done before,” he said. A board member since 2009, he is focusing not so much on persuading people to give as he is on increasing the nonprofit’s revenue from its sliding-scale mental-health counseling services.
“A lot of providers don’t take insurance and Medicaid, and we do,” McKee said. “We know there’s a huge need in the community. We just have to get the word out.”
The shift to earned income isn’t unique to JFS. As a generation of older, reliable donors dies off, nonprofits have had to get creative to attract younger, more fickle ones — especially as the number of nonprofit organizations has exploded in the past decade.
In Orange, Osceola and Seminole counties alone, there are more than 7,000 of them.
“It can feel like we’re all fighting over the same slice of the pie,” McKee said.
And in a year where hurricanes, wildfires and tsunamis left hundreds of people dead and thousands homeless, giving to recovery efforts both hurt and helped local agencies.
At the Heart of Florida United Way, president and CEO Jeff Hayward said that while unrestricted giving dipped, many donors gave more — but earmarked those funds for the aftermath of hurricanes Irma and Maria.
“The good news is that we raised an additional $1.9 million that went to helping people rent hotel rooms and start to rebuild their lives,” he said. “But the year was really a mix for us. We’re optimistic about our position for the future, although when it comes to the stock market and the impact it will have on philanthropy — if I knew that, I probably would be working on Wall Street.”