Top Ways the Tax Law Impacts Nonprofits

TGRC Tax presentation

Timothy A. Clark, Managing Director UST and Wealth Strategies Advisor at U.S. Trust speaks to nonprofit professionals at the Texas Grants Resource Center

Many of the changes to the federal tax code (passed at the end of 2017) have taken effect this year. This month, the Texas Grants Resource Center (TGRC) had a primer on how these changes might influence the work of nonprofit organizations.

Timothy A. Clark, Managing Director UST and Wealth Strategies Advisor at U.S. Trust and Amber Carden, Senior Vice President and Private Client Advisor at U.S. Trust/Bank of America Private Wealth Management spoke to nonprofit professionals at the TGRC to help guide their mission-driven work through the maze of tax changes.

Some of the top tax law changes that might impact nonprofits are:

  • The adjusted gross income limitation on cash contributions to public charities, including donor advised funds, was increased from 50 to 60 percent;
  • Standard deduction increased from $12,700 to $24,000 for those filing Married-Joint;
  • Pease limitations were repealed (phase-out of itemized deductions no longer applicable).

Will these changes lead to more or less charitable giving? Conventional wisdom suggests that an increase in the standard deduction (for example) means fewer people will itemize deductions, meaning fewer people will be able to take the federal income tax charitable deduction.

However, Americans have been making charitable gifts since before there was even a tax code. Also the data shows that Americans give to nonprofits because they are charitable (not necessarily for a tax incentive). This was one the biggest take-aways from the presentation: nonprofits should keep appealing to donors’ sense of going good – this sense is generally a higher motivator than tax incentives.

 

 

Image: Erler

IMPORTANT:  This presentation is designed to provide general information about ideas and strategies. It is for discussion purposes only since the availability and effectiveness of any strategy are dependent upon your individual facts and circumstances. Always consult with your independent attorney, tax advisor, investment manager, and insurance agent for final recommendations and before changing or implementing any financial, tax, or estate planning strategy.
 
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Nonprofits: Forget About “Better Late Than Never”

Last week the Greater Good Geek blog focused on nonprofit researcher Penelope Burk’s findings. This week “The Geek” will highlight another of Burk’s ‘best practices’ in writing thank you letters to donors – which can be summed up in two words:

Be prompt.

Burk conducts surveys of those who donate to nonprofit organizations. Getting a prompt thank you note is something donors do expect. Burk’s research on thank you letters, by the way, culminated in a list of the 20 Characteristics of Great Thank You Letters which was published in Burk’s Donor-Centered Fundraising.

But donors’ expectations is just one reason to be prompt. Another reason comes from the IRS. They state that a donor is required to “keep a contemporaneous written acknowledgment for a charitable contribution.” That key word – contemporaneous – essentially means “be prompt.”

Mentioning the IRS is always a good excuse to point you to their handy Charitable Contributions Guide for Tax Exempt Organizations. “The Geek” suggests having this guide at your fingertips and reviewing it periodically.

So because the Greater Good Geek is always looking for fun ways to remember nonprofit best practices, here is a haiku poem to remind you of this important thank you note element. Have a great #HaikuTuesday as well!

10 Haiku Tuesday