There will be big changes for charities in 2018. Most of those changes will be because of tax reform legislation that passed before the end of 2017. In 2018, the standard tax deduction will nearly double. People filing as single will see their standard deduction jump from $6,350 to $12,000. For married couples, the deduction will go from $12,700 to $24,000. How does that impact charity? Well, in order to see a tax benefit from charitable donations, your tax-deductible charitable donations must exceed the standard deduction. So, while the effects of this legislation on the average American family are yet to be seen, experts are predicting a big change in charitable giving. Philanthropists will need to give at a much higher level to see tax benefits; their giving will need to more than double. The nonprofit sector is bracing for a big change.
But the good news is that donors have a lot of power. And you can make a big difference for the causes you care about before the year ends. The last days of the year are huge for nonprofits … and this year is even more important. Here are four ways you can make your charitable donations go further before 2017 ends.
(Oh, and as always, talk to a tax professional to understand how these changes affect your philanthropy!)
1. Make your 2018 charitable donations in 2017
If you usually give one large gift near the end of the year, you can make your gift go further by donating for the next year this year. You’ll have a double-whammy tax deduction and make a big difference for organizations that are hunkering down to strategize for 2018’s changes.
2. Set up monthly charitable donations for 2018
Sustaining support means a lot for nonprofits. They don’t necessarily know that they can count on big year-end gifts … but when you’ve set up a monthly gift, they can budget more effectively and rest easy knowing they can count on your support. If you tend to give sporadically, or in lump sums, try spreading out your giving over the course of the year in 2018. Instead of waiting until the end of the year and making your charitable donations right before the tax deadline, set up a recurring donation!
On Razoo, we make it easy by allowing you to set up monthly donations to your favorite charities. When you check out, just donate the amount you want to give each month and click “Donate Monthly.”
This sets up a monthly recurring charge on your card through Razoo. You can easily manage your monthly donation from your Razoo profile, and you can stop it at any time. Being able to count on your monthly donation is huge for nonprofits. It’s stable income they can use to fund their programs year-round, and will help your favorite causes weather this sea change.
3. Donate your 2018 tax savings
Tax reform may likely change the way we make charitable donations. One good thing about the standard deduction going up so substantially is that many of us will see bigger refunds. If you’ve been in the habit of making a year-end gift for the tax benefits, you can shift your philanthropic efforts toward donating all or part of your refund to charity instead of counting on charitable donations for a bigger refund. You’ll still be able to support the causes you care about, while breaking even (or better) in terms of what money goes back into your pocket when you file your return.
4. Think beyond the tax return
Lots of people who give at higher levels are driven by the tax benefits. But that’s not all that drives us to give. And for most of us, who don’t give enough during the year to justify itemizing our charitable donations on our returns, taxes aren’t our motivation for giving at all. Whether it’s redistributing our wealth, creating social change, supporting charities doing great work in our communities, or the warm-fuzzies we get from helping causes close to our hearts … taxes shouldn’t be the main motivation for charitable giving.
While initially it might be off-putting to think about not seeing a tax benefit for your charitable donations, think about why you give. Odds are, it’s the feeling that you’re making a difference in the world. And charities are going to need your help, if this tax bill results in the projected loss of billions across the nonprofit sector in 2018. They have programs to run, staff to pay, and lights to keep on. They need your support.
So, as we look forward to 2018, make a resolution to keep supporting charities. They depend on you! They can’t create change in the world without your help. Maybe the tax benefits were motivation to dig a little deeper into your pockets, but smaller donations can make a huge difference too. Those red kettles of pocket change the Salvation Army collects around the holidays? They bring in millions each year for the charity, and help them accomplish a lot. Small donations matter too! So even if you can’t afford to double your annual donation, keep giving. It all adds up!