Americans are a very generous people. According to Giving USA, total charitable support in 2017 was $410 billion, the largest amount ever. Two-thirds of Americans make charitable contributions and some 63 million Americans volunteer. These are all signs that American’s giving spirit and commitment to volunteerism remain solid, but there are some worrisome signs on the horizon.
While giving increased this past year, according to research by the economists at Texas A & M reported in the Atlantic “the average American has grown more tight-fisted in recent years, donating a smaller portion of his and her income to charity than he or she did 10 years ago.” Between 2000 and 2014 (the last year for which data is available), the percentage of American households that give to charity has declined by more than 10 percent with the highest drop-off among those 51 to 60 years old.
Households earning less than $100,000 annually are contributing a smaller a percentage of their total giving than they did in 2000. The Chronicle of Philanthropy recently reported that “nonprofits are increasingly relying on the donations of the wealthy. Gifts from households earning $200,000 or more accounted for 52 percent of all itemized donations in 2015.” Further, volunteer rates have been declining over the past decade. This past year, the volunteer rate among all Americans reached a 10-year low. There is no consensus regarding why volunteer rates are falling. We are definitely beginning to see troubling trends regarding charitable giving and volunteerism.
An increasing number of municipalities across the nation are filing tax appeals challenging the tax-exempt status of nonprofit hospitals and educational institutions in their community. The impetus for these challenges was a 2015 U.S. Tax Court ruling that found that Morristown Hospital failed to demonstrate that it qualified for a property tax exemption. The result was a $15.5 million settlement. Legal experts believe the case could have enormous implications for nonprofit hospitals nationwide.
The latest and most direct assault on the charitable sector is the recently passed Tax Cuts and Jobs Act. The act, according to Linda M. Czipo, president and CEO of the New Jersey Center for Nonprofits, will have a “devastating impact on nonprofits and communities they serve.” The legislation increased the standard deduction to $12,000 for individuals and $24,000 for couples. This will reduce the number of low- and middle-income taxpayers who itemize and take the charitable deduction, which was a key incentive for charitable giving.
According to the National Council of Nonprofits, “the charitable deduction would be out of reach of more than 87 percent of taxpayers. The Joint Committee on Taxation estimates that itemized deductions will drop by $95 billion in 2018. The change is estimated to shrink giving to the work of charitable nonprofits by $13 billion or more each year. Estimates are that this drop in giving would cost 220,000 to 264,000 nonprofit jobs.”
And for the first time in our history we have a president who has not shown an inclination to encourage philanthropic giving or volunteerism. In fact, his frequent boasts about his generous giving often upon scrutiny fall far short of his words.
On occasion President Trump has been downright hostile to the notion of freely giving of one’s self (almost as if he sees it as sign of weakness). For example, at a recent campaign event in Great Falls, Montana, after attacking the media and talking about putting America first, he derided “a thousand points of light,” the phrase coined by President George H.W. Bush during his 1988 presidential campaign.
Here’s the current president: “What the hell was that, by the way, thousand points of light? What did that mean? Does anyone know,” said Trump. “I know one thing: Make America Great Again, we understand. Putting American first, we understand. Thousand points of light. I never quite got that one.” I realize that President Trump doesn’t talk in prose, but his gratuitous attack on the concept of a “thousand points of light” that “spread like stars” throughout the country is a little much even for him.
You almost get the idea that President Trump doesn’t understand that the charitable sector is supposed to operate in manner different from the rest of the dog-eat-dog world in which he is accustomed to operating.
In 2015 the Donald J. Trump Foundation, in an IRS tax filing posted online on the nonprofit-tracking site GuideStar, admitted that it violated the prohibition against “self-dealing,” which bars nonprofit leaders from using their charity’s money to help themselves, their businesses, or their families. In one section of the form the IRS asked whether the Trump Foundation had transferred “income or assets to a disqualified person.” A disqualified person could be Trump, who is the foundation’s president, or members of his family or a Trump-owned business. The Washington Post reported on “several instances — worth about $300,000 — where Trump seemed to have used the Trump Foundation to help himself.”
As government continues to extricate itself from the provision of key elements of the safety net, the role of our nation’s charities will become increasingly crucial. Supporting and nurturing them should be one of America’s first priorities.
Editor’s note: Stoolmacher, a longtime consultant to nonprofit groups, serves on the NonProfit Transition Working Group established by Reed Gusciora, the new mayor of Trenton, to help support his vision for the city. The group is co-chaired by Jeff Vega, CEO of the Princeton Area Foundation, and Kelly Ingram, president of the I am Trenton Community Foundation.