Tax Bill’s Effects on Nonprofits Remain to Be Seen

Washington, D.C., December 20, 2017 – Following final passage today of a tax bill that is slated to go to President Trump’s desk for signing as soon as possible, Alliance for Justice Bolder Advocacy program Director Abby Levine released the following statement:

“The biggest impact of this tax bill for nonprofits is likely to be the increase in the standard deduction, because that increase is projected to result in far fewer taxpayers itemizing their returns. While it’s important to note that contributions to 501(c)(3) nonprofits will still be tax-deductible, taxpayers only get the deduction if they itemize. Taxpayers might decide not to donate to 501(c)(3)s if they aren’t going to itemize and get the tax break for their donations — and that means 501(c)(3)s could see a drop in their income, perhaps a significant one. This could make it increasingly difficult for organizations to meet the pressing needs in our communities, at a time when they will be needed even more.

“On the other hand, if tax deductibility is no longer a factor for many taxpayers, it will also be interesting to see whether there is any noticeable shift among donors toward donating to 501(c)(4) social welfare organizations, organizations that can do more advocacy but to which contributions are not tax-deductible.”