Highlights from The Giving Institute’s new study
By Michael J. Tomlinson, CEO
As an active member of The Giving Institute, I am eager to share some encouraging new research that is shaping the future of philanthropy both today and tomorrow. These findings confirm what I, and many of my colleagues in the nonprofit sector, have long believed: Americans overwhelmingly support a universal charitable tax deduction.
This research, commissioned by my trusted friends and colleagues at Dunham+Company for The Giving Institute, shows how tax incentives may inspire greater generosity and ensure that more nonprofit organizations have access to critical funds that keep their doors open and their services steady.
When generosity is encouraged, everyone benefits! Yet, immediate legislative action is needed to boost charitable giving in response to these findings. Read on for an executive analysis of The Giving Institute’s latest report and what it means for nonprofits.
Public Opinion on the Charitable Tax Deduction: Key Findings
A bill is currently on the Senate floor, backed by Sen. James Lankford (R-OK) and Sen. Chris Coones (D-DE) to pass the Charitable Act. This bipartisan legislation would help address challenges of nonprofit funding by allowing all taxpayers – not just those who itemize – to deduct more donations from their taxes.
According to The Giving Institute’s research, 78% of current donors and 59% of non-donors are in support of charitable tax deductions.
80% of Republican and Democrat donors support the universal charitable tax deduction.
Inaction is not an option. As leaders in fundraising and philanthropy, we must amplify the voice of the American people. “These findings validate the need for legislative action,” Brenda Asare, chair of The Giving Institute, wisely said. “Expanding the charitable tax deduction would foster a stronger culture of generosity, facilitate greater participation and ensure that nonprofits have the resources they need to survive and serve their communities.”
A universal charitable tax deduction will benefit all Americans, but may prove most impactful among younger generations. The study also reported that about 70% of Gen Z and 57% of Millennials are highly motivated by tax incentives.
I often encourage nonprofits to provide as many onramps to participation as possible, to as many prospective donors as possible. A universal charitable tax deduction is a key way to make the act of giving inclusive and attainable for all.
Declining Charitable Giving and the Need for Policy Change
This research on donor sentiment couldn’t come at a more critical time. In 2024, The Generosity Commission Report revealed some concerning trends:
- 20 million American households stopped giving between 2010 and 2016.
- Individual giving continues to decline year-over-year, despite an increase in total giving. As a result, small nonprofits that consider individual giving their “bread and butter” are struggling to stay afloat.
Rick Dunham, my respected colleague and fellow Giving Institute member paints a stark picture of what might happen without public policy to encourage giving. “Without more donors, many organizations may be forced to cut services or shut down, leaving critical gaps in support for those who need it most,” he said. “Congress must act now to pass the Charitable Act.”
Here’s the good news: The Giving Institute’s study shows promising evidence on how a universal charitable tax deduction would positively impact giving behavior.
A few highlights from the data:
- 51% of donors say they would give more if a universal charitable tax deduction were available. (Currently, 55% don’t itemize their giving).
- A third of donors would increase their giving by 50% if they could deduct.
- Nearly half of non-donors would give more if they could deduct.
A universal charitable tax deduction is something most – if not all – of us can agree on.
Creating a Stronger Future for Nonprofits and Philanthropy
A universal charitable tax deduction is not just good policy – it’s essential for the future of philanthropy. Encouraging generosity strengthens communities, supports critical human services, and protects the longevity of our most beloved and trusted organizations.
If you’ve read this far, thank you! Now here’s your homework: Contact your senators and representatives and encourage them to vote YES on the Charitable Act as it makes its way through the Senate right now.
It’s up to us as leaders in philanthropy to rally our policy makers to make the Charitable Act a reality.
