The percentage of taxpayers who give to charity is declining, a study conducted by United Way Worldwide finds.
According to the organization's Research Brief 2019 (6 pages, PDF), which examines IRS and University of Michigan data from nine thousand households going back to 2000, the percentage of Americans who give to charity has been falling steadily, with the biggest drop occurring among taxpayers who do not itemize their deductions. According to the report, while 87 percent of all filers itemized their deductions in 2005, the figure was 81 percent in 2007 and has barely moved since. As the organization notes, taxpayers who itemize their deductions are twice as likely to give to charity as those who don't, with 82 percent of the former donating to charity and only 40 percent of non-itemizers doing so.
The report also found that taxpayers who itemize give more than twice as much to charity as those who do not, with the average donation among the former roughly $3,500 and the average among the latter nearly $1,330. While the analysis found that average gift size has increased for both groups in current dollars, it has fallen, when adjusted for inflation, for non-itemizers.
The Chronicle of Philanthropy, which provided data for the study, reports that Rep. Danny Davis (D-IL) has introduced legislation "to extend the charitable deduction for all taxpayers, regardless of whether a taxpayer itemizes deductions." For decades, nonprofits have urged Congress to enact such a provision.
More recently, United Way has been vocal in its call for changes to the 2017 Tax and Jobs Act, which, in the organization's view, disincentivized the itemization of deductions and has led to a drop of approximately twenty million in the number of taxpayers who itemize. Historically, charities focused on the delivery of human and social services have received significant support from middle-income workers who itemize their returns.
"The decline in the numbers of donors is already having a negative impact on the charitable sector," said Steve Taylor, senior vice president and counsel for public policy at United Way Worldwide. "We believe the tax law will only accelerate this decline and hurt our most vulnerable communities who can least afford it."