New Research Reveals Impact of TCJA on Philanthropy

  • 2017 Trump Tax Law caused $20 billion drop in charitable giving
  • 23 million households stopped giving to charity after the law’s passage
  • Study by Indiana University Lilly Family School of Philanthropy and University of Notre Dame
  • Standard deduction for individual income taxes doubled under TCJA
  • Higher thresholds removed incentive for millions to deduct charitable gifts
  • Estimated $4 billion moved from 2018 giving to 2017
  • Impact on philanthropic behavior studied using Philanthropy Panel Study data

The 2017 Trump Tax Law led to a significant decline in charitable giving, with 23 million households ceasing donations. The study by Indiana University Lilly Family School of Philanthropy and the University of Notre Dame found that this was due to the doubling of the standard deduction for individual income taxes under the Tax Cuts and Jobs Act (TCJA). Researchers used data from the Philanthropy Panel Study, which tracks over 4,200 families since 2001. The findings reveal a $4 billion shift in giving from 2018 to 2017. Further research will examine the law’s effects on subsequent tax years.

Factuality Level: 8
Factuality Justification: The article provides a detailed account of the impact of the Tax Cut and Jobs Act on charitable giving, supported by research from credible institutions. It presents factual data and statistics, although it could benefit from a more concise presentation to avoid tangential details. Overall, it maintains a factual tone but includes some elements that could be perceived as slightly biased or opinionated.·
Noise Level: 8
Noise Justification: The article provides a detailed analysis of the impact of the Tax Cut and Jobs Act on charitable giving, supported by data from credible research institutions. It discusses long-term trends in philanthropy and holds policymakers accountable for the consequences of tax changes. The information is relevant, well-structured, and stays on topic, offering insights into how tax policy affects charitable behavior.·
Private Companies: Nathan Cummings Foundation
Key People: Mark Ottoni-Wilhelm (Professor of Economics at Indiana University and Professor of Philanthropic Studies at the Lilly Family School of Philanthropy)

Financial Relevance: Yes
Financial Markets Impacted: Tax policy and charitable giving
Financial Rating Justification: The article discusses the impact of the Tax Cuts and Jobs Act (TCJA) on philanthropic giving, which affects the financial behavior of taxpayers and nonprofit organizations. It also mentions that the study’s findings could be relevant to future policy decisions regarding tax deductions, as some provisions in the law are set to expire in 2025.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: The article discusses the impact of a tax policy change on charitable giving, but it does not describe an extreme event such as a natural disaster, financial crisis, or any other type of crisis.·

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