WNC charities concerned giving may be impacted by tax deduction changes
Charities across the country and in Asheville are closely following a change in the tax laws effective Jan. 1.
Tax reform passed by Congress and approved by President Donald Trump could provide incentive for millions of Americans to take a new higher standardized tax deduction instead of itemizing deductions that typically include donations to charities. That change, some public policy experts say, will mean charities will lose donation dollars because people who typically donate in return for a tax deduction will no longer have an incentive to do that.
“The standard deduction, starting next year, means only about 5 percent of taxpayers will be itemizing their taxes,” said David Heinan, vice president for public policy for the North Carolina Center for Non-Profits.
Heinan said, while there is no way to definitively say some Americans donated to charities to get a deduction, timing indicates it was an incentive.
“A significant portion of giving happens between now and the end of the year,” he said.
Tim McElyea, who runs the Veterans’ Quarters under the ABCCM charities umbrella, said he believes there is reason for concern.
“Eighty-two percent of all charitable giving across the U.S. comes from people who itemize their taxes,” said McElyea. “Without that tax incentive, we’re definitely concerned.”
For Bill Murdoch, who runs Eblen Charities, the concern is for those who need the help.
“How is it going to affect the people we reach out and serve? We’re just going to have to wait and see,” he said.
But Murdoch and McElyea believe the Western North Carolina community feels a strong tie to helping those in need. Both are confident, that while there may be a drop in donations, the bulk of charities will continue to receive assistance from individual donors.