Half of Wealthy Donors Changed Their Giving Patterns Due to Tax Law, Study Says

Half of wealthy donors changed their giving habits in 2018 in response to the 2017 tax law, according to a new survey from Fidelity Charitable.

Seventy-six percent said their annual giving stayed level, and 15 percent increased their giving year-over-year, according to the survey. Only about 9 percent said they gave less than in the previous year.

Instead, the tax law, which roughly doubled the standard deduction, prompted donors to change the way they give, using tactics like “bunching” or “bundling” in which they made larger-than-usual contributions one year and none in the next year to maximize the tax benefits.

The survey polled 475 “affluent and high-net-worth charitable donors who itemized tax deductions two of the last three years.”

Other findings from the study:

• Of the 9 percent of donors who said they decreased their giving, 48 percent said changes to the tax law were the primary reason.
• 75 percent say they will keep their giving about the same in 2019, and 14 percent say they will give “notably more.” Eleven percent say they will probably give less.
• 32 percent of wealthy donors were either somewhat or very surprised by their tax situation in 2018 — particularly baby boomers, 40 percent of whom reported being either somewhat or very surprised. Of all of the survey participants who were taken aback by their tax bill, 55 percent said their tax situation was worse than expected. Again, baby boomers they felt the pain more than millennials or Gen Xers, with 68 percent saying their 2018 tax bills were worse than expected.