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New Law Prevents Some Taxpayers From Writing Off Charitable Donations

DAVID GREENE, HOST:

If you're making some final charitable donations in 2018 thinking you'll get tax deductions, you might be in for a surprise. The new tax law makes it far less likely that you can deduct charitable giving. And charities and nonprofits are actually pretty concerned about this. Barb Anguiano from member station WBOI in Fort Wayne, Ind., has more.

BARB ANGUIANO, BYLINE: Pam Green lives in Elkhart, Ind. And at the end of every year for the past 30 years, she's thought about charity and her taxes.

PAM GREEN: I have a file. And every January 1, I mark it 20 - like, this year, it said 2018 taxes. And so every time - if I made a run to Goodwill, I got a receipt. And I had a running total of everything. I itemized everything.

ANGUIANO: But after Thanksgiving this year, all that changed. She got a call from her financial planner, who told her because of the new tax law, she could no longer write off her charitable donations. Instead, she'd be taking the now higher standard deduction.

GREEN: And I feel badly because some of these places are probably wondering why they're not going to hear from me.

ANGUIANO: Some nonprofits and charities are already worrying about the impact those tax changes will have on them. Rick Cohen is with the National Council of Nonprofits and estimates that charities and nonprofits like churches will see big drops in donations in the coming year. As more people take standard deductions and don't itemize, the drop in charitable giving could top $20 billion nationwide.

RICK COHEN: Really, what it means for a lot of the smaller organizations is just a lot of drops by, you know, $25 here, a reduction of $50 there. That's just going to make it that much harder for those groups to continue serving their communities.

ANGUIANO: And Joseph Rosenberg, who's with the Tax Policy Center, says while charities are worried about the change, most taxpayers aren't even aware of it yet.

JOSEPH ROSENBERG: They may not even realize that their tax incentive for giving to charity has changed until they go to file their tax return next April.

ANGUIANO: Of course, he notes people donate for all sorts of reasons. A tax deduction could just be one of them.

ROSENBERG: It is important to remember that the reason people give to charities is much more complicated than just a simple tax story.

ANGUIANO: Sam Centellas heads La Casa de Amistad in South Bend, a local immigrant advocacy group. He says he's seeing increased giving but thinks that's because of the current immigration crisis.

SAM CENTELLAS: So we're getting people to give out of a desire to help our cause, not because they're worried about, you know, what their taxes are going to look like in April.

ANGUIANO: That said, he notes that December is usually the group's busiest donation month, bringing in as much as a quarter of its budget.

CENTELLAS: So my worry is that people, when they're doing their taxes in April, will realize, like, oh, you know, this giving doesn't help my taxes. So next year, I'm not going to give as much. That's where we're worried.

ANGUIANO: That also worries Steve Taylor, who is with United Way Worldwide. He expects donations from middle-class families to drop significantly next year.

STEVE TAYLOR: Every charity that raises money from middle-class folks are having to be innovative. It just happens that the tax law is making it harder for us to do that.

ANGUIANO: That reality is already hitting charities and nonprofits. Come April, it will hit taxpayers who have traditionally ramped up giving this time of year with deductions in mind. For NPR News in Fort Wayne, I'm Barb Anguiano. Transcript provided by NPR, Copyright NPR.

Barbara Anguiano