We are a philanthropic nation. Even with the challenges of recent economic times, charitable giving increased by $8 billion in 2011, an increase of almost 4 percent from 2010, according to the 2012 report by the Center on Philanthropy at Indiana University. Individuals gave $217 billion, compared with $209 billion in 2010.
People give to nonprofits and tax-exempt organizations because they care about the charity and its mission but there is also a tax motivation: for instance, your $100 donation might only cost you $72 or $67 after taxes. Tax deductions are certainly extra motivators; that’s why 30 percent of all annual giving happens in December.
Effective for your 2013 tax return, itemized dedications will be reduced by 2 percent for every $2,500 of income above certain thresholds.
This applies to several areas of deductions but is expected to have a proportionally large influence on the nonprofit community. Why? Because individuals consider charitable donations discretionary while other currently deductible expenditures, such as the deduction for state and local taxes, are not.
There are many reasons why high-net-worth individuals make donations. The 2012 Bank of America Study of High-Net-Worth Philanthropy issued in November 2012 surveyed 700 high-net-worth households from throughout the United States.
While 74 percent of this group state they are deeply committed and volunteer their time and energy, in addition to supporting a specific cause via financial contributions, 32 percent cited tax advantages as a significant motivator for giving.
Further reductions – as part of overall tax reform – are pending in the House Ways and Means Committee that could impact both charity-minded individuals (who itemize deductions) and the charities they sustain. Down the road, the changes could mean dramatic decreases in charitable donations and, in turn, significant reductions in funding and support for much-needed programs that span arts, education, health care and more.
PBN is now accepting applications for its newest award program and event for RI & Bristol County to celebrate the Manufacturing Renaissance that is evolving regionally and across the country. The deadline for applications is March 20th.
PBN's annual Book of Lists has been an essential resource for the local business community for almost 30 years. The Book of Lists features a wealth of company rankings from a variety of fields and industries, including banking, health care, real estate, law, hospitality, education, not-for-profits, technology and many more.