A growing group of charitable donors believe that eliminating the charitable tax deduction would not harm giving in the US

A new national study of 1,000 American charitable donors shows that while very few want to see the charitable tax deduction completely eliminated, many are open to some limits on deductions.

The Donor Mindset Study, conducted jointly by Opinions 4 Good (Op4G, Portsmouth, NH) and Grey Matter Research (Phoenix, AZ), finds that only half of all donors believe charitable deductions should be fully tax deductible for those who itemize. One-third believe there should be limits, almost equally divided between those who feel contributions should be deductible up to a certain amount and those who feel the limit should be for certain income levels. Only 10 percent want the charitable deduction eliminated, while 7 percent are uncertain.

Opinions vary substantially by age, with donors 65 and older almost twice as likely as those under age 35 to call for full deductibility (67 percent to 39 percent). Surprisingly, perceptions on this issue do not vary according to whether donors consider themselves to be politically liberal, moderate, or conservative, nor according to whether donors itemize deductions on their tax returns.

A majority of donors predict there will be an overall drop in charitable giving if contributions are no longer tax deductible. Six out of ten feel donations in the US will drop, including one-third who feel the decrease will be substantial. However, 18 percent feel giving will actually increase if contributions are no longer tax deductible. This belief is held almost exclusively by donors under age 50, and particularly by donors under the age of 35.

Grey Matter asked this same question in a 2012 study among a national sample of 553 donors. The proportion who believe cutting the charitable deduction will result in increased giving by Americans has tripled in the past five years, from 6 percent to 18 percent of all donors. The proportion who believe their own giving will rise if contributions are no longer tax deductible has more than quadrupled, from 5 percent to 22 percent.

Ron Sellers, president of Grey Matter Research, noted that these findings fly in the face of what many non-profit organizations believe. “There is widespread concern in the industry that reducing or eliminating the charitable deduction will have a chilling effect on giving,” Sellers said. “The surge in the proportion of donors who think giving will actually increase may surprise many.”

He continued, “When people believe eliminating the charitable deduction will increase donations, it may be they are seeing it as an overall attempt to reduce taxes or reduce the income disparity, which theoretically could leave many Americans with more money to give. They may also believe a theory which has been previously advanced regarding cuts to government services, which is that Americans will be more generous to non-profits in order to make up the difference. Or it could be simple confusion.”

Grey Matter Research and Op4G jointly pointed out that if charitable organizations want the federal government to keep the charitable deduction in place long term, they need to start communicating more effectively with the American public (including their own donors) – not just the government.

Please e-mail ron@greymatterresearch.com for a free copy of the full report.

About Grey Matter Research:
Grey Matter Research is a marketing research and consumer insights company located in Phoenix, Arizona. Grey Matter has extensive experience with research related to non-profit organizations, with numerous donor-supported organizations as clients. Grey Matter works directly with donor-supported organizations and in partnership with the fundraising, branding, and marketing services agencies that support them.

About Op4G:
Philanthropic online market research panel Op4G invites its panel members to participate in paid online research surveys, and then requires they donate a portion of their incentives – at least 25% and up to 100% – back to one of its 400-plus member non-profit organizations. Op4G’s unique approach to recruiting yields a highly engaged group of quality people who, as respondents, are dedicated to helping market research clients fulfill information needs. Since beginning client delivery in June 2011, panel members have donated over $425,000 to Op4G’s growing number of non-profit partners. Op4G is headquartered in Portsmouth, NH and operates globally.


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