21 Nov During holiday season, remember to give to nonprofits

During holiday season, remember to give to nonprofits

By Liana Toscanini and Jim Klocke

Charitable giving from individuals is the lifeblood of the nonprofit sector and critical to maintaining the social fabric of the commonwealth. But during this year’s holiday season, there’s even more of a reason to give to nonprofits in the Berkshires.

The Commonwealth’s over 38,000 nonprofits educate us, keep us healthy, support our most vulnerable populations, and steward our cultural and environmental treasures. In addition, nonprofits employ more than 551,000 of us in Massachusetts. A healthy nonprofit sector advances the public good through both the services it delivers and the people it employs.

However, a recent nationwide drop in giving places both of these benefits at risk. A report from the Giving USA Foundation released this summer shows a $3.21 billion drop ($10.4 billion adjusted for inflation) in individual donations in 2018. This drop is unique in these economically strong times: over the last 40 years, individual giving has only dropped in three non-recession years.

Recent changes in federal tax policy are to blame. The 2017 federal tax reform law made sweeping changes to the way that individuals file their taxes. It nearly doubled the standard deduction, and capped the amount of state and local taxes that can be deducted on federal taxes. The result of these changes is that many middle income donors no longer receive a federal tax break for their charitable contributions.

Many donors may have just realized that this tax season. As a result, there may be a drop in giving in 2019 even larger than the drop in 2018. This is bad news not only for many nonprofits, but also the communities they serve: in 2018, individual donations made up over two thirds of all donations nationwide given to support nonprofits’ important missions.

Fortunately, those who lost their annual federal tax write-off may still realize financial benefits to charitable giving in other ways. Some donors can restore their charitable deduction by donating non-cash assets, and/or cash for multiple years of giving to donor-advised funds. Others can make qualified charitable distribution (QCD) donations from IRAs, or compress multiple donations into this year to reach above the standard deduction threshold.

Another trend rising in popularity is giving donations in lieu of physical gifts. For example, instead of buying small presents for friends and family, many now opt for giving a donation in the name of the gift recipient. In addition to supporting the important work of a nonprofit, this type of gift can be a thoughtful way to spread the holiday cheer.

To keep nonprofits strong in the new year, it is especially important to remember nonprofits in giving plans at the end of this year. Visit massnonprofitnet.org/massgives for a searchable list of nonprofits that lift up the Berkshires and that depend on individual gifts to enhance the common good.

Liana Toscanini is founder and executive director, Nonprofit Center of the Berkshires. Jim Klocke is CEO, Massachusetts Nonprofit Network.

Article reprinted from The Berkshire Eagle