The tax legislation Senate Republicans are expected to bring to the floor this week compromises donations to nonprofits that touch virtually every part of American life, from education and health care to financial literacy and public lands. Estimates of similar plans show that annual charitable contributions could drop by as much as $11 billion under the Republican tax proposal.
The fall in donations would partly result from the planned increase in the standard deduction, which would reduce the number of families that itemize from 45 million to as low as 7 million. Families that itemize are almost twice as likely to donate to charities: 83 percent of itemizers donate some amount to charity, as compared to 44 percent of non-itemizers. In fact, itemizers account for over 80 percent of total giving by taxpayers.
Nonprofits and working Americans across the nation would feel the effects of this drop. In New Mexico, the decline in itemizing would put more than $39 million in donations at risk and hurt more than 48,000 nonprofit workers. In Tennessee, where more than $200 million in donations would be put at risk, more than 28,100 nonprofits and 185,700 nonprofit workers would lose. Republicans should work to make our nation’s nonprofits even stronger community anchors, rather than undermining the tax incentives that allow them to flourish.