Tax changes could cause decline in giving to nonprofit fundraising
November 12, 2010
Uncertainty over future tax rates could put a damper on nonprofit fundraising this holiday season, some experts say.
According to USA Today, the fourth quarter of the year is typically the period when nonprofit organizations receive the majority of their annual contributions, in part due to tax considerations. However, the expiration of a tax break for senior citizens, uncertainty over the estate tax and the prospect of higher taxes for households earning more than $200,000 could cause donations to decline.
The estate tax, especially, could damage nonprofit fundraising efforts. A 2004 study by the Congressional Budget Office estimated that the repeal of the estate tax would cause charitable contributions to decrease by up to 12 percent, cites the paper.
"People give because they care about a cause or for other reasons, but certainly, tax conditions affect the timing of the gift, the level of the gift and the manner in which they give," Una Osili, director of research at the Center on Philanthropy, told USA Today.
A recent survey by Bank of America and the Center on Philanthropy at Indiana University showed that even wealthy givers aren't insulated from the struggling financial system. Donors are being much more selective and mindful of where they give and the possible impact those dollars will have.