New Tax Laws and Philanthropy

By Schubert Club

Today’s blog post is written by Paul D. Olson, the Schubert Club’s Director of Development. 

Schubert Club has a long history of generous patrons who believe that great music contributes to a great community. The history of philanthropic giving in Minnesota is among the top in the nation. We are fortunate that people in our community understand the need for non-profit organizations that contribute to our quality of life, and respond by giving their time and resources to ensure they are strong today, and for the future.

For 100 years, donors have had the option to claim their charitable gifts as a write-off on their taxes, and this philosophy helped encourage giving. The strength of the non-profit sector has in a large part, benefitted from tax itemization that allowed more dollars to go to their favorite charities while reducing total personal taxes. The new law that just went into effect allows a larger standard deduction and lower tax rates, giving most people a simpler tax situation, so itemizing may not be an incentive to reduce their taxes. So, what does this mean for future philanthropic giving?

Last year, gifts from individuals made up nearly three-quarters of the $390 billion donated to philanthropies, outpacing the money flowing from foundations, bequests and corporations.* The tax code has encouraged these gifts since the charitable deduction was created in 1917. There is speculation that future giving could go down because there isn’t an incentive for people to do itemizing of their charitable giving.

I beg to differ. Schubert Club donors are loyal, and understand the value of our concerts, education programs and museum as being assets in their lives, and for our community. Giving comes from the heart, and in the first two months of this new tax era, we haven’t experienced a noticeable change in donations. Time will tell, but I believe the extra dollars in our pockets means we have extra dollars to help the charities that touch our lives.

Sarah Caruso, president of the Greater Twin Cities United Way, said she worries about the impact of the new tax bill but is not giving up on any donors just yet. “I’m not going to plan a retreat right now,” Caruso said. “I plan to go out and make the case for the need. And the need in the community is not changing.”

Schubert Club is not changing, and the need and desire for great music continues. Thank you in advance for your continued generosity and thank you for being a part of the Schubert Club family!

*Source: Patrick Rooney, professor of economic and philanthropy and director of the Lilly Family School of Philanthropy at Indiana University