2017 was a painful, exhausting year. Wide-spread resistance beat back some of the more egregious assaults on human and civil rights—challenging the Muslim ban, stopping attempts to repeal the Affordable Care Act, and showing up in massive demonstrations across the country and around the world. But we all know that the Trump administration has done enormous damage to the environment, undermined civil and human rights, and exacerbated an already unsustainable distribution of wealth at the expense of those struggling to make ends meet.
Last year ended with the Republicans passing a massive tax reform law. We don’t yet know the full impact of the law; the complexity of the bill along with the rush to enact it has created significant uncertainty. But it is regressive. It provides large tax cuts to the wealthiest individuals and businesses and is expected to swell the deficit, likely resulting in significant cuts to vital social programs. On top of that, the changes to deductions may alter how millions of people give to non-profits.
The new tax regulations maintain the charitable gift deduction but double the standard deduction for individuals. Some experts predict that 27 million fewer people may itemize as a result while other estimates project that as few as 10 percent of taxpayers will continue to itemize deductions on their returns, down from the current one-third. To clarify, gifts to non-profits are still tax deductible but only if you itemize, thus making the tax benefits of charitable contributions irrelevant to many more taxpayers.
There is great uncertainty about what the impact of these changes will be for charitable organizations like the RFC. If someone made donations in the past just for the tax deduction or because they cared about the work and wanted the deduction, and no longer itemizes, the new law would significantly reduce if not completely curtail their giving. If a supporter considered the tax deduction a bonus but was mostly motivated by their commitment to a non-profit’s mission, it might not change their giving.
I hope (and believe) that the vast majority of the RFC’s supporters fall into the last category. My communication with donors over the years, and my father’s before me, has reinforced how committed our supporters are to the work of the RFC and the beneficiary families we serve. And our community knows that those families’ needs have grown in the face of recent attacks and that this tax “reform” will add to the desperation of many of our beneficiary families.
As part of our request for funds in letters and at events, I often borrow my father’s language and encourage supporters to make a tax deductible donation to the RFC since our values are likely more in line with theirs than are the federal government’s. That has never been more true. Now it is an even greater act of solidarity to donate to the RFC and other progressive institutions despite the revisions to the tax code, and I have faith that our community will continue to stand with us as we support the children of resistance.
I’d love to know your thoughts on how the changes to the tax law might impact your giving in 2018 and beyond. leave a comment below or email me at exdir@rfc.org.