Tuesday, November 28, 2023
If you are like me, your inbox today is filled with emails from nonprofits looking for donations – Giving Tuesday has been in full swing. I’ll admit to being somewhat cynical about Giving Tuesday. I support the charities I support during the year and I don’t need a special day to do it. I suppose one could see it as a day of penance for the twin orgies of commercialism known as Black Friday and Cyber Monday. I am, however, without shame and feel no need to buy any indulgences on Giving Tuesday for my recent overconsumption.
But it would appear that I’m alone in my cynicism and that’s a good thing – no one needs curmudgeons like me grumbling about such things! GivingTuesday.org tracks the impact of Giving Tuesday on charitable donations. There are a number of interesting observations in the information collected in their Data Commons about giving trends, including the impact of Giving Tuesday. According to one of their reports, Giving Tuesday enhances giving among supporters, grows existing relationships, and importantly, engages younger volunteers.
Givewp.com, citing the 2022 GivingTuesday.com study, states that
In 2022, donors in the United States gave $3.1 billion on Giving Tuesday, 15% more than in 2021
More than 20 million people gave, with 6% more donors in 2022 than in 2021
82% of nonprofits that participated in Giving Tuesday tried something new
#GivingTuesday trends annually on social media
More than $1 billion of U.S. Giving Tuesday donations were contributed online
That lead me to think about a potentially tax law significant change that occurred between 2022 and 2021 – that being the sunset of the $300 above the line deduction for cash charitable gifts from the CARES Act. It seems like that particular deduction would be beneficial to the folks that Giving Tuesday targets – smaller, younger, and online donors. That deduction hasn’t been in effect for 2022 and 2023, but there is at least some noise about trying to bring it back. There have been a number of bills trying to revive and maybe even increase the deduction – you can find a summary of them at the Charitable Giving Coalition website here. The most recent bill would reinstate the deduction for 2023 and 2024 but increase the limit to 1/3 of the standard deduction.
Who knows what the future of the above the line deduction is, given that all of the tax cuts that are facing sunset will be revisited here in due time. In a world where the increased standard deduction remains and fewer people itemize, the above the line charitable deduction has its merits, especially among younger and less wealthy donors. That being said, Roll Call reports that the Joint Committee on Taxation estimates that the above the line charitable deduction cost $2.9 billion in 2021, which is a pretty significant chunk of change.
While we wait to see what the tax writers will do… it’s now 11 pm eastern on Giving Tuesday – there’s still time to support your favorite charity, even if you won’t get an above the line deduction for it.
Grumpily guilted into generosity, eww