Ours is a generous nation when it comes to philanthropy. When we give our time and gifts to a nonprofit organization on behalf of a worthy cause, we shine. Giving USA reported that in 2016 charitable giving rose to an all-time high of $10.53 billion.
In Central Connecticut - including towns served by the Community Foundation of Greater New Britain such as Berlin, New Britain, Plainville and Southington - we’ve experienced first-hand just how generous our citizens can be. But just how generous will they remain in the coming months and years given recent changes in tax law? That is the question of the moment.
In December, President Trump signed into law the Tax Cuts and Jobs Act. Among other changes it lowered top marginal tax rates and increased standard deductions.
In the wake of these major changes, serious questions abound as to the impact this legislation will have on individuals, families, corporations and nonprofits.
In its recent analysis of the new law, the U.S. Congress’ Joint Committee on Taxation estimated that the number of taxpayers who itemize will decrease from 31 percent in 2017 to just 13 percent this year and that those claiming charitable deductions will decrease by more than half.
Consensus seems to be that charitable giving will be impacted negatively. But to what degree? Apprehension is growing among donors, in nonprofit organizations, and in local town halls where reliance is heavy on nonprofits for the myriad ways they lift up communities.
Previous research has noted that tax benefits are an important part of the motivation for charitable giving in many people. The nonprofit industry, recognizing this, has shone a spotlight on those benefits as a key marketing strategy.
But with uncertainty the order of the day, here’s a new focus for consideration: We need to consciously rise above the apprehension at hand and focus on mission and impact for the good of our communities. The younger generations are to be applauded for taking the lead in asking the tough questions: What impact will my gift of time or treasure make? Will you be a good steward of my investment? How will you keep me informed and involved?
As nonprofits we need to share our missions in new and creative ways.
We must show how we will lift our communities effectively and in partnership with our contributors. As donors and prospective donors we must do what we can with our time and money as nonprofit support is relied upon more heavily amidst shrinking federal, state and local budgets.
Let’s shift the focus to what’s best for our community without leaning on a potential tax deduction as a motivator. Volunteer with your local nonprofit.
Fall in love with their mission. Build a fund or scholarship at your local foundation. Let’s do it for the right reasons, together, as one generous nation, indivisible and with care for all.
David J. Obedzinski is President of the Community Foundation of Greater New Britain which serves the communities of Berlin, New Britain, Plainville and Southington.