Recent LEWIS poll finds majority (55%) of Americans who donated to political campaigns in the last year gave more than in previous years, indicating possible room for growth in charitable donations.
Still, many charity advocates signal apprehension in their expectations for charitable giving in the coming year due to central changes in the recent tax law. While the true impact of recent changes to the tax law remains unknown, organizations dependent on charitable giving are particularly concerned that the increase in standard deduction may leave Americans – especially moderate-income taxpayers – to view itemizing deductions as a less beneficial endeavor than in previous years.
As Americans file next year and gain a better understanding of how their personal finances will be affected by the new tax law, organizations relying on charitable donations are moving forward, prioritizing donor development, retention, and echoing the case for giving throughout the community. Considering individual giving makes up roughly 72% of all donation to charities in the United States, such concern is warranted.
While the recent LEWIS poll finds individuals with an annual household income of $50k or more were more likely than those making less money to report donating to charitable causes in the last year, roughly one-in-four (23%) individuals from households of lesser income still contributed to local charities.
Q. Thinking about the past year, did you donate monies to any of the following, if at all?
Across generations, most survey respondents describe their giving in the last year to political campaigns, local or national charities, and causes of friends or family members to have remained steady or increased. Millennials were more likely than Gen Xers or Boomers to say that their overall giving increased this year compared to previous years, suggesting momentum in charitable giving among a cohort of individuals typically earning less than $41k in annual household income. Particularly notable among those who donated to political campaigns is the increase in giving among Millennials (74%) and Gen Xers (57%), compared to previous years; one-in-three (33%) Millennials also report increased giving from previous years to a national charity or a friend or family member’s cause.
Q. Compared to previous years, did you donate more, less, or the same amount of monies to any of the following?
The increased voting relevance and political giving among Millennials may be signaling a new wave of energized, altruistic Americans in a generation with optimistic earning potential. Traditionally a cohort characterized by moderate-incomes, Millennials to-date have been largely unaffected by the tax incentive related to itemization. As such, the new increase in standard deduction may not be as impactful to their giving habits as anticipated. If such donor momentum and excitement among youth is cultivated by organizations dependent on charitable giving, future giving in the United States may continue to steadily grow.
In part II of this post, we ask Americans their plans for charitable giving in the coming year and hear tips and tricks from the LEWIS team in Washington, DC on how organizations can effectively reach and communicate to donors as the impact of the tax law unfolds – stay tuned for the results!
*Conducted from February 27th to March 2nd, 2018, among a nationally representative sample of 1,500 Americans.
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