Impact of tax law changes, 2020 census participation uncertainties for nonprofits

Article published by Midlands Business Journal
Written by Michelle Leach

The tangible impacts of federal tax law changes, community -specific giving days, and controversial U.S. Census discussions represent a mixed bag of opportunities and challenges for nonprofits.

“The release of the Giving USA 2019 Report in mid June was the first look at how the December 2017 tax bill has impacted charitable giving and nonprofits,” said Lincoln Community Foundation Vice President for Development Chip Deuse, a reference to changes that allowed fewer individuals to itemize their deductions on their 2018 tax returns because the standard tax deduction has nearly doubled in most cases. “Nationally, charitable giving rose 0.7% to $427.2 billion from 2017 to 2018. This is decline of 1.7% adjusted for inflation. These figures include giving from individuals, foundations, bequests and corporations.”

Individuals’ giving fell 1.1%, minus 3.7% adjusted for inflation, which Deuse said is of primary importance to many charities because individuals account for the largest donors.

“Foundation giving rose 7.3% (up 4.7% after inflation) with grantmaking from Community Foundations rising a strong 10.2%,” he said. “Lincoln Community Foundation gave a record $13 million in grants in 2018. Bequests were unchanged from 2017 to 2018 and corporate giving grew 5.4% (2.9% after inflation).”

Locally, Deuse referenced the show of support for its May 30 Give to Lincoln Day.

“The total amount raised of nearly $5.6 million was up nearly 21% over last year,” he said. “This follows similar large increases of 25% and 20% in 2017 and 2016.”

Nonprofit Association of the Midlands Director of Programs Rosey Higgs noted how giving days across communities celebrate the “small donor.”

“[Giving Days] are time when people might make small gifts to several different organizations,” she said. “There is a lot of sharing on social media, and they’re really intended to generate a lot of new donors, not necessarily big donors.”

Higgs said nonprofits are getting better at using social media.

“We’ve also seen, over the last couple of years, that board member might give donors call after they give to say, `Thank you,’ which is really surprising to people, especially if they’ve given $10. It is really a special touch.”

Higgs also said many organizations celebrate Giving Tuesday (Dec. 3 this year) as a break from Black Friday, and an opportunity for holiday-themed giving.

United Way of the Midlands’ Greg Vassios, SVP, corporate and donor relations, said this year the organization partnered with around 700 local organizations running workplace campaigns or making corporate contributions to its annual campaign.

“We’ve also seen good response from individuals who are supporting United Way of the Midlands outside of the workplace, like through our #HatsOff4UnitedWay campaign,” he said. “Every time someone from the community posts picture of themselves taking off a hat with this hashtag, Mutual of Omaha, First National Bank and Blue Cross and Blue Shield donate a dollar to United Way to help families in need.”

Vassios said donors want to know that dollars are used efficiently to meet pressing needs.

“Ninety-two cents of every dollar they donate is going right back into this community, funding basic needs, education and financial stability programs that provide circle of support for our neighbors in need,” he said.

Pottawattamie County Community Foundation President and CEO Donna Dostal indicated the tangible impact of investors’ dollars run the spectrum of projects: arts and culture, health care, education, recreation, and human services.

A reference to aforementioned tax changes, Dostal noted increased interest in donor-advised funds.

“Our team has had several conversations around bundling, where donors take look at what their expected giving will be over the coming years, then pool the amount into the current year to reach the minimum threshold to receive tax benefits for the year,” she said. “They then can utilize the flexibility of their donor -advised fund to be philanthropic over the coming years.”

Additionally, the state of lowa’s Endow lowa tax credit allows donors who make gifts to eligible funds qualify to receive a 25% credit in addition to federal deductions for certain charitable gifts.

Most recently, Dostal said, increased focus on several key issues facing southwest lowans resulted in new “Field of Interest Funds:” Mental Health and Substance Abuse Fund of Southwest lowa and Women’s Fund of Southwest lowa.

The former fund enhances how nonprofit service providers educate the public, provide preventative solutions, and access internal training, while the latter improves the quality of life and well-being of women and their families in areas including education, access to affordable, quality child care, women’s health and safety, and aging in place.

Women Investing in Nebraska highlighted its grants to place additional mental health counselors via University of Nebraska -Lincoln’s Counselor-in-Residence program in at least two residence halls, and
to support the Nebraska Children’s Home Society Raising Your Grandchildren program to expand offerings to grandparents in Lancaster County through its Lincoln office, in addition to its mix of psychoeducation and supportive network resources available in Omaha and the surrounding area.

WIN Chair Candy Henning noted grant recipients reflect Nebraskans at different stages in their lives, experiencing major transitions.

“Navigating the move to university life and returning to a child-rearing role are very different experiences for people, but both can be exhilarating and stressful,” she said. “The two programs WIN is supporting this year are reaching out in meaningful and personal ways to people who need support.”

Since census results are used to allocate funding, earlier discussions about the inclusion of citizenship questions (deemed unconstitutional) are giving rise to concerns about participation in the 2020 survey — with big implications for nonprofits who depend on federal dollars.

“The implications of not having a complete count will last for 10 years; this is not money we’re missing out on for one or two years,” said Hannah Young, de facto chair of Nebraska Counts, a statewide Complete
Count Committee spanning 501c3 nonprofits. “For every Nebraskan that doesn’t get counted, thats $2,000 per year that we miss out on, and the areas that are undercounted are the ones that need it the most… one of the biggest undercounted areas is children under the age of 5 and immigrant populations.

“There is a lot of valid fear right now, and we want to reiterate that this census is anonymous and can’t be shared with any government agency.”

One of the biggest implications also includes the potential for Congressional redistricting; Nebraska Counts is addressing these issues with an educational toolkit that might be used by the likes of college Get Out the Vote volunteers, and lunch-hour webinars that address the many parts of the census, how it works and fit well into nonprofit employees’ busy lives.

Young, who also serves as NAM’s public policy and strategic partnership manager, indicated they’re in an advantageous position: as nonprofits, they’re trusted faces and resources in the communities they serve, and among the very people they want to assure are counted, yet are at most risk of being undercounted.

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