Leaders of several nonprofit organizations in Louisville hope – in fact, pray – that when donors write year-end checks to charities this week, donors will feel as generous as they do. they still are, despite significant changes to attractive federal tax legislation.
Under the 2017 Tax and Employment Tax Act, about 21 million households are not expected to claim a detailed deduction for their donations to non-profit organizations this year, bringing tax policy analysts estimate a resulting reduction in charitable donations of $ 20 billion a year in the country. next two years.
"We hope and trust the people who will continue to support us, regardless of the tax law," said Stan Siegwald, spokesperson for Dare to Care, the largest food bank in the region.
Previously, most people detailed what they had paid in local and national income taxes, in mortgage interest and county property taxes in the 1040 return from Schedule A. Taxpayers also indicated the amount they donated to charities in the lower part of the schedule.
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But many who complete their 2018 taxes will no longer detail the deductions at all, as the new rules limit the deduction of local taxes and income taxes and property taxes. The standard deduction on 2018 returns has almost doubled from 2017 – USD 12,000 for individuals, USD 18,000 for heads of household and USD 24,000 for married couples filing jointly.
In the past, for example, a couple who filed together would have bundled about $ 14,000 in detailed deductions, including about $ 3,000 in cash. Donations to non-profit organizations increased the amount of the reduction in their taxable income.
For 2018, they will likely choose the standard deduction of $ 24,000, without it being necessary to list church donations, donations to charities and the payment of local tax. .
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A random sample of nonprofit groups from Louisville this week – those who feed the hungry, shelter the homeless and promote the scouts – showed the executives worried, but they still did not know how far the changes are going smother them.
"It's a bit of a wait and see," said Jeanine Triplett, director of development and spokesperson for Girl Scouts of Kentuckiana. "It can hit the house when people start making taxes."
The fear is real for nonprofit leaders because "they feel like they're being blamed," said Ray Weis, president and CEO of Dismas Charities, a Louisville-based group that operates reintegration centers. homes for people in transition.
Combined with a new law in Kentucky, which requires non-profit organizations to collect sales taxes on auction tickets and other items, it is "a kind of perfect storm," Triplett said. "The timing is horrible."
Most groups, here and across the country, receive the bulk of their donations in the last three months of the year, with a surge of final donations in December.
Local leaders said that they did not dismiss the generosity of a community that mobilized when there was a call for action. And it's not just about the rich, but about modest people who spend $ 100 to $ 300 every year, but not for tax relief.
"The bulk of our contributions come from individuals and people who pay us are not interested in the deduction," said Barbara Anderson, executive director of Haven House, Jeffersonville Homeless Shelter. , in Indiana.
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Haven House always sends thank you letters by mail and provides the tax identification number of the organization so that donors can declare the donation on their taxes. The group also proposes to provide more details about the donation, if necessary, said Anderson.
A donor who sends a check for $ 500 every two months asks for a letter, but "some people never claim it on their taxes". Nevertheless, the tax changes are worrying, she said, because "the biggest donations may not come as easily as before".
Siegwald at Dare to Care echoed other leaders who said they had not yet changed their fundraising strategies. The food bank is set to release an annual budget of $ 7.5 million. That feeds nearly 20,000 separate donors, from large companies to the retired widow, who sends between $ 50 and $ 100 a year, Siegwald said.
At the Salvation Army, the annual cauldron campaign has dropped by about $ 45,000 this season, as retailers reduced their collections in their local stores, from the usual beginning to mid-November, between Black Friday and Christmas Eve.
"This is not because people have given less.It is because of fewer days (of collection)," said Commander Roy Williams, area commander of the group, adding that donors seemed more concerned about "we are changing the quality of life of someone."
This feeling has resonated for people after the press coverage of the recent closure of homeless camps in downtown Louisville. This brought the donors to Haven House "out of work," Anderson said.
Carbide Industries, which organizes an annual fundraiser, has delivered a new commercial stove for their cooking. Texas Roadhouse, the chain of restaurants, offered a sumptuous supper consisting of pulled pork and chicken, sweet potatoes, many sides and a dessert.
Then the next day, a group of women came with new bikes for each child of the shelter. Toddlers also have wheels to fit them, said Anderson. "Our kids and their parents will never forget this Christmas."
Triplet Girl Scouts said that despite all the generosity they see each year, the mood in the nonprofit community is cautious. Some groups are already seeing flat or reduced donations for the year. They are banking on a series of year-end checks to push them to reach their goal.
Nobody takes anything for granted, she says. "We're dead (now) and I'm going to take that."
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Grace Schneider: 502-582-4082; email@example.com; Twitter: @gesinfk. Support strong local journalism by registering today: courier-journal.com/graces.