Philanthropic giving across the United States is trending downward, and nonprofits are taking another hit as state and federal budgets cut grants and contracts.
“It’s very worrisome for nonprofits right now,” said Chany Ockert, a certified fundraising executive and consultant in the Flathead Valley.
According to the Association of Fundraising Professionals, which collects its information from databases used to enter donation information, the number of donors nationwide has dropped 6 percent from this time last year, and revenue has declined by 2 percent.
“If you compare it to the economy that’s been growing at 3 to 4 percent, that’s pretty significant,” Ockert said. “Instead of seeing the economic growth also affect nonprofits, we’re seeing a decline.”
Last year was also a down year, she said, but the final few months of the year made up for it in “rage giving,” or giving motivated by anger at the current state of politics and society.
“We’re seeing larger donors giving bigger and larger amounts, so there are fewer donors giving in general, and that’s worrisome as well because typically you want to have a broad base of donors. Nationally you want to see that. But we’re seeing it shrinking,” Ockert said.
Also at the end of 2017, President Donald Trump signed into law a major tax reform bill, which changed standard deductions to the point that most tax-filers will not itemize their return, experts said. Under current law, the charitable-giving deduction is only available to taxpayers who itemize.
The Tax Policy Center estimated that this shift would reduce charitable giving by up to $20 billion a year.
The law also more than doubled the size of estates that would fall under the federal estate tax. The tax often works as an incentive for the super-wealthy to offload some of their estate to charities to avoid the tax. With fewer estates subject to the tax, that incentive disappears.
“Nonprofits are hit on both ends as donors and the state and federal revenue sources pull back,” Ockert said.
Political spending for the midterm elections may also have taken a chunk out of philanthropic giving, she said.
Montana might not feel these effects quite yet, Ockert said, since the state typically follows a little behind national trends. But anyone who has thought about donating to a nonprofit should consider doing so this year, she said.
“The first thing that donors need to realize is that it takes money to run nonprofits, and if they care about these causes, to be generous,” Ockert said.
Finding a charity with a mission that coincides with your own interests and passions is a good way to get involved. Visit www.CharityNavigator.org or Guidestar.org to get started on your search, while the Flathead Nonprofit Development Partnership also has a list of many local nonprofits.