Giving by individuals drops in 2018

NEW YORK -- Charitable giving by individual Americans in 2018 suffered its biggest drop since the Great Recession of 2008-2009, in part because of Republican-backed changes in tax policy, according to the latest comprehensive report on Americans' giving patterns.

The Giving USA report, released Tuesday, said individual giving fell by 1.1%, from $295 billion in 2017 to $292 billion last year. It ended a four-year streak of increases, and was the largest decline since a 6.1% drop in 2009.

Experts involved with the report said 2018 was a complex year for charitable giving, with a relatively strong economy overall and a volatile stock market. Giving by corporations and foundations increased, so total giving -- including donations from individuals -- edged up by 0.7% to $427.7 billion.

Among various factors affecting charitable giving was a federal tax policy change doubling the standard deduction. More than 45 million households itemized deductions in 2016, according to Giving USA, and that number likely dropped sharply in 2018, reducing an incentive for charitable giving.

"Whenever there's a major tax policy change like that, it has an effect." said Rick Dunham, chairman of Giving USA Foundation, which publishes the annual report. It is researched and written by the Indiana University Lilly Family School of Philanthropy.

Dunham and other experts said it will likely take another year of analysis, with the help of additional data, to reach a more precise estimate of the tax change's impact.

Stacy Palmer, editor of the Chronicle of Philanthropy, a magazine covering the not-for-profit world, suggested the changes would have relatively less impact on charities relying on wealthy donors, and greater impact on social-service providers and other charities getting broad support from middle-class Americans.

"Charities who depend on them are really worried," Palmer said.

United Way, the largest traditional charity in the U.S., is among the organizations relying on middle-class donors. About 90% of its donations come through workplace-based campaigns, according to its chief marketing officer, Lisa Bowman.

Bowman said United Way won't know until later this year how it fared for its 2018-19 fiscal year, but she noted traditional not-for-profits face many new challenges, including competition from online crowdfunding operations such as GoFundMe.