Twin Cities non-profit organizations report no drop in donations after first year of tax changes

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The leaders of the St. Paul Chamber Orchestra felt a little worried about the end of the year. It was the same for members of the Animal Humane Society and Loaves and Fishes.

The three non-profit organizations rely on end-of-year donations to fund their missions, ranging from quality music to finding sanctuary for orphaned animals to feeding the hungry. The associative world worries donations would deposit since the federal tax changes threatened to reduce the number of taxpayers detailing the charitable deductions.

But at the close of the accounts in 2018, these gloomy forecasts so far have not materialized. Many Twin Cities non-profit organizations, ranging from arts organizations to disaster relief organizations to charities, have reached or are close to meeting their fundraising goals. end of year.

"The first wave of consequences for tax changes is subtle to non-existent," said Brian Molohon, vice president of development at Union Gospel Mission.

"There was a lot of uncertainty as to how this was going to unfold, but we found no change in the behavior of the donors," said Katie Berg, director of development for the company. chamber orchestra.

Many nonprofit organizations in Minnesota do not report significant changes in end-of-year donations, said Kari Aanestad, director of promotions for the Minnesota Council of Nonprofits.

The council will conduct an official investigation this winter to gather reliable data, but its executive director, Jon Pratt, said it was possible that the consequences they feared never materialize.

"It will really take two years to find out what the effect is," he said.

According to preliminary figures, the Saint Paul-based Union Gospel Mission, which runs a shelter and rehabilitation program for the homeless, has only exceeded its goal by 1 percent. end of year $ 6.5 million.

"If that's where we meet and nothing else gets in, I'm going to dance in the hallway," said Molohon. "I can make up that 1% for the rest of the year."

But not-for-profit leaders say they do not feel gasped yet. They think it may take another year to determine the impact once people have calculated their taxes, figured out how the changes affect them and then adjusted their donations.

"It's still too early to know if tax changes are changing everyone's habits," said Christopher Stevens, head of promotion at the Walker Art Center.

"Donations to the Walker have been stable," said Stevens, "but it's early on, culturally, as people better understand how it works, but that does not mean it's not coming." is just that we have not felt it yet.

The tax impact is not clear

For many non-profit organizations, the last three months of the year are a critical period during which the majority of their annual donations arrive. It's a season where people of all religious traditions light candles, sing holiday songs and feel generous. And they want to donate by then to be able to list them.

After a complete tax reform in 1986, some predictors may suffer. That did not happen, said Pratt.

Nonetheless, nonprofit sector leaders say they would like to see potential barriers to the removal of donations. The new amendments to federal tax legislation that came into force in 2018 could have the effect of removing this incentive for many taxpayers.

Under the new tax code, the lump sum deduction for couples has almost doubled to $ 24,000. People can still detail the charitable contributions in their federal tax return, but the higher standard deduction probably means that fewer people will detail in general.

Fewer households likely to detail

According to the Tax Policy Center, a national think-tank based in Washington, DC, about 11 percent of US households will detail deductions this year, up from 26 percent previously. The state's Revenue Department predicted that 13 percent of Minnesotians will detail the deductions, down 36 percent, according to a report from the Council of Nonprofits.

The Arlington, Va.-Based Council on Foundations predicted a potential decrease of $ 16 billion to $ 24 billion in annual charitable donations when the tax reform bill was passed by President Donald Trump in December 2017.

Hadar Susskind, senior vice president of government affairs council, said the early indications were good. Some charities saw their donor base decline in 2018, he said, and smaller donations tended to be smaller than in previous years. But "above all, we still do not know," he said.

Minneapolis Foundation officials, where individuals and families set up donor-recommended funds, often compared to charitable chequing accounts, reported seeing a slight decrease in the money spent on these funds at the end of the year. year. But these funders have continued to use the money they had on these accounts to donate generously to charities, "said Ellen Goldberg Luger, Senior Vice President of Philanthropic Services.

Loaves and Fishes officials slipped in December after receiving almost record donations in November. "December was a 31% drop," said Executive Director Cathy Maes.

The association still finished slightly higher at the end of the year compared to 2017, but the December dive was disconcerting. "It makes me pause," said Maes. "I hope this is not a sign for the future."

Some charities celebrate the increase in donations.

Scott's community partnership, Carver and Dakota, which runs a variety of programs including Head Start, Meals on Wheels and a Pantry, has seen its cash donations increase by $ 13,000. The number of individual donors has also increased.

The Animal Humane Society finished the month of December with just 1% ahead of its $ 1.9 million goal and "a length of time" compared to the previous December, "said Philanthropy Director Meghan Bethke.

Bethke said the year – end totals only reinforce her belief that people give heart, not just because of the bottom line.

"We live in a very generous philanthropic community," she said. "In the end, people give because work and causes are important to them."

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