Donations by individuals are the oxygen of nonprofit organizations. The Tax Cuts and Jobs Act of 2017 (TCJA) has added new urgency to the question of what is the future of charitable giving by individuals in the United States. Specifically, how large of an impact, and for how long, will the new tax law affect individual giving—and which charities will be most adversely affected? In 2018-19, Indiana University Lilly Family School of Philanthropy and Americans for the Arts set out to understand the challenges that TCJA could pose on the philanthropic landscape. We reviewed philanthropic trends, donor behavior research, data-lag issues, tax policy, and economic models of the TCJA’s impact. After careful consideration of this material by academics, fundraising professionals, and tax policy experts, it is clear there are troubling phenomena in motion that, without intervention, could bring the nonprofit arts sector to a critical tipping point.
To address the issue in a timely manner, the Lilly Family School of Philanthropy and Americans for the Arts have designed a research solution that will bring reliable data to the table within a single year of deployment. It is built around a national panel study of 2,000 nonprofit organizations representing the full range of size, subsectors, and geographic regions. We will track key fundraising metrics and pair those with a qualitative on-the-ground perspective about shifts in contributions by individuals, changes in demand for services, and the ability to meet that demand. In other words: Real people at real organizations telling real stories about the impact of the tax law changes.
Read More