Charitable giving in America drops in 2018 after tax policy changes: report

Americans donated less to charity in 2018, according to a new study, in part because of changes in tax policy.

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Individual giving fell by 1.1 percent from $295 billion in 2017 to $292 billion last year, the Giving USA report found. It was the largest decline since a 6.1 percent drop in 2009 after the Great Recession. The fall in individual charitable giving also ended a four-year streak of increases.

The report, which is published by the Giving USA Foundation, is researched and written by the Indiana University Lilly Family School of Philanthropy.

Experts involved with the report said 2018 was a complex year for charitable giving, with a relatively strong economy overall and a volatile stock market. Giving by corporations and foundations increased, so that total giving — including donations from individuals — edged up by 0.7 percent to $427.7 billion.

Among various factors affecting charitable giving was a federal tax policy change that doubled the standard deduction. More than 45 million households itemized deductions in 2016, according to Giving USA, and that number likely dropped sharply in 2018, reducing an incentive for charitable giving.

"Whenever there's a major tax policy change like that, it has an effect." Rick Dunham, chair of Giving USA Foundation, said.

Dunham and other experts said it will likely take another year of analysis, with the help of additional data, to reach a more precise estimate of the tax change's impact.

Among the nine charitable sectors identified by Giving USA, there were mixed results. Donations were up for nonprofits involved in international affairs and environmental or animal-welfare issues. Giving to foundations was down, as was giving to education, to religion and to public-society benefit organizations — groups which work on such issues as voter education, civil rights, civil liberties and consumer rights.

Giving to religion — perennially the biggest sector — is estimated to have declined by 1.5 percent in 2018 (a decrease of 3.9 percent adjusted for inflation), with a total of $124.52 billion in contributions.

Una Osili, an associate dean at the Lilly Family School of Philanthropy, said giving to religious institutions has been lagging behind other sectors for several years. Reasons including declining attendance at church services and a rising number of Americans not affiliated with any particular religion.

For the largest U.S. denomination — the Roman Catholic Church — a long-running clergy sex-abuse crisis also has taken a financial toll. According to a recent Pew Research Center survey, about one-fourth of U.S. Catholics have decreased donations to the church because of the scandals.

Empty Tomb, a Christian organization based in Champaign, Illinois, that researches religious giving, says the decline is longstanding. According to its research, Americans gave about 3 percent of their disposable income to churches in 1968, and less than 2.2 percent in 2016.

Empty Tomb's leaders, Sylvia and John Ronsvalle, have attributed the decline at least in part to a failure by church leaders to inspire more than a perfunctory level of generosity. Their latest report refers to a perception in some quarters that church is "boring."

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Overall, Americans' level of generosity is similar to what it was decades ago. For 2018, giving by individuals represented 1.9 percent of total disposable income, down from 2.4 percent in 2005 and the same as the rate in 1984.

Similarly, total charitable donations have hovered around 2 percent of the gross domestic product for many years; for 2018, that figure was 2.1 percent.

The Associated Press contributed to this report.