Giving Tuesday 2019: Reports Show Trump Tax Cuts Reduced Individual Donations, Boosted Corporate Fundraising

This year's Giving Tuesday charity event aims to pull in millions of more dollars than the year before, but reports show that President Donald Trump's 2017 tax cuts have hurt fundraising efforts overall.

While fundraising data shows that charitable giving hit an all-time peak in 2018 with U.S. donors shelling out $427 billion, giving is actually down 1.7 percent from 2017 when adjusted for inflation, according to a Giving USA report. Worse yet, growth in the number of individual donors has declined by between 5 and 8 percent, according to the Fundraising Effectiveness Project's 2019 Second Quarter Fundraising report released last month.

The Giving USA's June report also found that the Republican tax-code overhaul passed and signed by Trump in 2017 directly led to individual contributions falling, while corporate donations actually increased—giving by individual donors fell 3.4 percent in 2018 after adjusting for inflation, according to Giving USA data.

That's because the GOP-backed tax law changes increased the number of people who became ineligible for tax breaks. The 2017 tax overhaul expanded taxpayers' standard deduction but pushed out millions of Americans from being allowed to claim a tax break as a result of donating to charities.Those breaks typically have the potential to inspire people to donate, Bloomberg noted in June.

Instead of compiling tax breaks from state and local taxes, mortgage interest payments and charity donations, millions of more Americans responded to the Trump tax cuts by simply taking the $24,000 standard deduction, which doubled as a result of the legislation.

Giving Tuesday trends show that the annual event has pulled in more money than the last for the past seven years. But the percentage of that money coming from corporations rose while the amount of individual donors declined. In overall U.S. donations, individuals make up two-thirds of all charitable giving and their reduced donations was offset last year by more donations from corporations taking advantage of their own tax breaks.

Seventy-three percent of companies reported raising more money for charity last year, according to data compiled by Nonprofits Source, a Maryland-based organization specializing in educating nonprofits on marketing and digital strategies. And 79 percent of companies reported increased donor participation rates.

An overwhelming 9 out of 10 companies reported offering a matching gift program to employees and potential donors, including tech giants such as Facebook and PayPal.

Last month, corporate financial benefits and insurance services company CBiz published tips about how the Tax Cut and Jobs Act of 2017 has shifted charitable giving. CBiz urged businesses to "strengthen retention efforts" and "improve social media use" in order to overcome the "negative, downward trend" the Trump tax cuts have had on charitable giving.

giving tuesday charity donations taxcut
This year's Giving Tuesday charity event aims to continue the trend of pulling in millions of more dollars than the previous year, but comes in the wake of several charitable giving reports which show President Donald Trump's 2017 tax cuts have hurt charity fundraising overall. JOE RAEDLE / Staff/Getty Images
Giving Tuesday 2019: Reports Show Trump Tax Cuts Reduced Individual Donations, Boosted Corporate Fundraising | U.S.