Una Osili, an economist and associate dean of research at the Lilly Family School, added in a statement, “Some aspects of the new tax policies may have a dampening effect on charitable contributions. Conversely, overall improvements in the economic environment will likely bolster charitable giving.”
Under the tax act, the estate tax law was changed to allow transfers of wealth up to $11.2 million for an individual without taxation. That and the change in the standard deduction may disincentivize people from giving to charities to reduce their taxes, according to the report.
In addition, corporations may be less likely to give to charity because of the large decrease in corporate taxes that is part of the new tax act, according to the report. Corporate rates went from a high of 35 percent to a flat rate of 21 percent.
“While no one can predict the exact effects of tax policy changes on philanthropy at this early stage, we can identify and track the factors that are likely to have the biggest impact on nonprofit organizations’ ability to serve those in need and the safety net those organizations provide,” Phillipe G. Hills, president and CEO of Marts & Lundy, said in a statement.