NEW LAW COULD HURT NON­PROF­ITS

Star-Telegram - - Front Page - BY GOR­DON DICK­SON gdick­[email protected]­gram.com Gor­don Dick­son: 817-390-7796; @gdick­son

De­cem­ber will be the first test of changes in fed­eral tax law, and non­profit or­ga­ni­za­tions are anx­iously wait­ing to see how they are af­fected.

Do peo­ple do­nate to char­i­ties out of the good­ness of their hearts, or for a tax de­duc­tion?

Or­ga­ni­za­tions such as United Way of Tar­rant County will soon find out.

De­cem­ber is the big­gest time of year for in­di­vid­u­als to make do­na­tions to non­profit or­ga­ni­za­tions.

Fed­eral tax law changes ef­fec­tive this year have dra­mat­i­cally in­creased the stan­dard de­duc­tion for in­di­vid­u­als on their in­come tax forms. Some ob­servers have ex­pressed con­cerned that char­i­ta­ble groups could see a dra­matic drop in con­tri­bu­tions, now that there is less fi­nan­cial in­cen­tive to give money to the needy and get a tax break in re­turn.

“This will be our first test to see whether or not ad­just­ments in the tax law have made changes in peo­ples’ giv­ing style,” said Leah King, United Way of Tar­rant County se­nior vice pres­i­dent and chief de­vel­op­ment of­fi­cer. “The real test may be next year, when ev­ery­one meets with their CPA and rec­og­nizes the changes.”

But King re­mains op­ti­mistic that in most cases Fort Worth-area res­i­dents make do­na­tions be­cause they want to help the needy, not re­duce their tax pay­ment to Un­cle Sam — es­pe­cially given the coun­try’s solid eco­nomic con­di­tions.

“I would be hard­pressed to see peo­ple give less,” she said.

The so­cial me­dia cam­paign #Giv­ingTues­day was ex­pected to gen­er­ate more than $270 mil­lion in on­line char­i­ta­ble do­na­tions, com­pared to $180 mil­lion in 2016 and just $10 mil­lion in 2012, ac­cord­ing to Forbes.

But the tax in­cen­tive for such gen­eros­ity is mostly gone.

The fed­eral Tax Cuts and Jobs Act passed by Congress and signed by Pres­i­dent Trump last year is ex­pected to cut the num­ber of house­holds claim­ing an item­ized de­duc­tion for char­i­ta­ble con­tri­bu­tions in 2018 to 16 mil­lion, less than half the 37 mil­lion house­holds who wrote off their fi­nan­cial gifts last year.

The new law nearly dou­bles the stan­dard de­duc­tion to $12,000 for sin­gle in­come tax fil­ers, $24,000 for cou­ples — com­pared to $6,350 and $12,700, re­spec­tively. So there is less in­cen­tive for tax­pay­ers to item­ize their de­duc­tions — in­clud­ing med­i­cal costs, un­re­im­bursed busi­ness ex­penses and char­i­ta­ble do­na­tions — to lower their tax bill.

But the ques­tion is, will they do­nate any­way?

Na­tion­wide, do­na­tions are up 2.6 per­cent for the first three quar­ters of 2018 com­pared to a year ago, ac­cord­ing to the As­so­ci­a­tion of Fundrais­ing Pro­fes­sion­als. The group at­trib­uted the in­crease to a spike in gifts of $1,000 or more.

But many char­i­ties rely upon smaller gifts, and those do­na­tions are down 4.3 per­cent com­pared to 2017.

Even be­fore the tax law changes, char­i­ta­ble do­na­tions to some groups were fall­ing. For ex­am­ple, United Way of Tar­rant County re­ceived $13.5 mil­lion in cam­paign con­tri­bu­tions in fis­cal year 2017, down from $15.3 mil­lion a year ear­lier, ac­cord­ing to the or­ga­ni­za­tion’s fi­nan­cial state­ments.

Those fig­ures don’t in­clude re­cent con­tri­bu­tions, be­cause the or­ga­ni­za­tion’s fis­cal year runs from June 30 to July 1 of each year.

RON JENK­INS AP

Cow­boys quar­ter­back Dak Prescott and run­ning back Ezekiel El­liott cel­e­brate at a Sal­va­tion Army ket­tle.

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