Tax deductions get more people to give to nonprofits

July 3, 2013

Tax deductions get more people to give to nonprofits

The economy has hit nonprofits harder than many other entities because when people don't have money to give, organizations can't receive donations. However, a federal tax deduction provided to people who contribute a certain amount to nonprofits has allowed charitable contribution numbers to grow, according to recent data compiled by The Giving USA Foundation and its research partner, the Indiana University Lilly Family School of Philanthropy.

The study revealed giving reached an estimated $316.23 billion in 2012, a 1.5 percent increase when adjusted for inflation from a revised number of $305.45 billion in 2011. Eugene Tempel, founding dean of the Lilly Family School of Philanthropy, said that if donations to grow at this rate, charitable ventures will be able to reach pre-recession levels in less than a decade.

"Overall U.S. charitable giving is on a slow uphill climb – with some bright areas and some that are not as bright," Tempel told The NonProfit Times.

Tax deductions can make it easier to give
Congress and President Barack Obama's administration have thought about potential ways to reduce the tax deductions people receive when they give to a nonprofit, and that is one of the ways reasons Americans donate to certain organizations. 

"Philanthropic giving fares best in a known environment, and has been dependent, in part, on certain factors holding true over the decades, including the charitable tax deduction," said David King, chair of the Giving Institute. "The uncertainty among donors created by policy makers' examination of the charitable deduction likely influenced giving in two very different ways in 2012."

Giving to nonprofits increased in 2012
With the tax deduction still in place, individual giving grew nearly 4 percent from the previous year. The government may be wise to look for other instances where they can remove deductions as nonprofits are a worthy cause for many Americans to contribute their money. Many of these people believe donating to organizations is an easy way to  get a refund on their taxes. This is especially true for Americans who give larger sums and expect greater deductions from the government. 

"Some donors may have 'prepaid' gifts they had intended to make in 2013 to ensure they received a tax benefit," said King.

single-post3027

Ready to chat?
Get in touch today to request a no-obligation savings evaluation.

Testimonials

In addition to their money-saving purpose on behalf of nonprofit organizations like AHS, First Nonprofit’s Nonprofit Unemployment Fund
streamlines the information we need to efficiently manage unemployment claims. Our relationship with NU Fund gave us access to such things as advice on planning for what’s ahead and how to analyze cost scenarios when unexpected events occurred. Both experiences were very helpful.

Asian Health Services, Oakland, CA

The Ensight Skills Center has enjoyed working with First Nonprofit for several years. We are enrolled in their Unemployment Savings Program and although we have not required a lot of intervention, there have been a few times. I know others have dealt with the same problem of unemployment fraud over the last year and in our case, a call to First Nonprofit (they actually answer their phones) cleared up the issue. They also sent us a letter to send to all our employees telling them what they needed to do to prevent this in the future and protect themselves. What a relief! Over the years if I have questions or concerns, they are happy to listen, advise and help if they can. Another BIG advantage of using First Nonprofit is that all the money that is paid into the Unemployment Savings Program lives on my balance sheet as an asset. The money continues to be Ensight’s not the governments. First Nonprofit has certainly given me peace of mind.

Ensight Skills Center, Inc, Fort Collins, CO

Visually Impaired Preschool Services has been a client of First Non-Profit since it was first offered as a benefit of VisionServe Alliance. We completed a thorough evaluation of cash savings to our agency before taking advantage of this wonderful benefit and it has been a very wise decision. Our experience with the processes from accounting to claims have been professional, expeditious and easy.

Visually Impaired Preschool Services, Louisville, KY

NYCON members who use First Nonprofit’s programs enjoy enduring savings and improved efficiency. Our association knows that success, because from the beginning, we achieved the same great benefits. Great savings, seamless technology, and responsive service. NYCON highly recommends First Nonprofit’s remarkable unemployment solutions.

New York Council of Nonprofits, Albany, NY

It has been our sincere pleasure to maintain a strong, vibrant business partnership with First Nonprofit. We greatly admire their strong industry knowledge, technical expertise, constant professionalism, knowledgeable and dedicated staff. They are always extremely responsive, personable and provide us with the necessary guidance and recommendations on a numerous variety of employment scenarios. We

Thresholds, Chicago, IL

Because INCS advocates for the operating conditions that allow charter public schools to provide high quality public education, partnering with First Nonprofit was an easy decision. First Nonprofit’s unemployment programs provide our member schools two operating elements crucial to their ability to provide high quality public education: savings and budget certainty. Capable, committed teachers are the key to student success. By participating in the unemployment insurance savings plan, charter public schools gain peace of mind and are able to invest more money in their teachers.

Illinois Network of Charter Schools, Chicago, IL

Throughout our membership in the Unemployment Savings Program, First Nonprofit understood our demands, community dynamics, and the importance of seamless services; that allowed us to serve our constituents better.

Prevent Blindness America, Chicago, IL