Charitable donors made some changes to their giving as a result of the Tax Cuts and Jobs Act of 2017, but most did not reduce donations, according to a Fidelity Charitable study released today.
While three-quarters of the 475 respondents in the survey said they are likely to give the same amount or more to charity in 2019, about half said they are adjusting their giving strategy through tactics like bunching, donating appreciated securities or using a donor-advised fund, Fidelity Charitable said.
Seventy-six percent of taxpayers donated about the same amount to charity in 2018 as they did the previous year and 15% gave more, the study said. It had been anticipated donations might fall because of the increased standard deduction.
The study showed millennials were more likely to have increased their charitable giving in 2018 than Gen Xers and baby boomers, although this was likely due to reasons other than tax reform, such as income growth or life stage, Fidelity Charitable said.
Those donors who work with a financial advisor were more likely to have increased their giving. Thirty-two percent of those who gave more said receiving a direct request from a nonprofit was the prime motivation.
Nine percent of taxpayers said they gave less in 2018 than the previous year, and nearly half of those said the tax changes were the reason.
“While recent reports show that individual giving as a whole may have been slightly reduced by recent tax reform, we are glad to see the commitment to giving staying strong," said Tony Oommen, charitable planning consultant at Fidelity Charitable. "We’re also encouraged that many donors are making adjustments to help them continue to maximize their giving, such as contributing to donor-advised funds, which provide a mechanism for those with charitable intentions to commit funds for that purpose and continue their giving over time.”