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Will Tax Law Affect Year-End Giving?

By Lori Sampson

This year many of our nonprofit clients have shared concerns about how changes to federal tax law in the Tax Cuts and Jobs Act (TCJA) might affect charitable giving.  As you may know, the standard deduction was increased in 2018; many taxpayers will no longer be able to itemize on their tax returns. That anxiety is heightened as we approach the year-end giving season, when many nonprofits have traditionally encouraged donors to make their charitable gift to increase their tax deduction for the year.  Up to one third of annual giving comes in December!

However, taxes are rarely a driving force behind businesses’ and individuals’ giving decisions.  Surveys indicate it is sometimes a factor, but it is rarely cited as one of the top three reasons for giving. And there are still strategies for leveraging tax benefits for charitable giving available to savvy nonprofits. The upshot is, your year-end communication with your donors has never been more important.

Now is the time the nonprofits should be putting the finishing touches on their holiday or year-end message. Themes of giving, gratitude or the fresh start of the New Year can inspire and motivate.  Help potential donors understand that they’re part of the solution to problems your nonprofit is trying to solve. Let them know specifically how their donation can make a difference.

The more personalized the request, the more effective.  Knowing what a donor’s interests are, when they last gave, how much they gave, and why, can help make the message specific and effective, particularly if you are looking at how tax implications might motivate a donor.  

For example, some donors may want to bundle their 2018 and 2019 contribution to raise their opportunity to itemize and reduce their taxes. Some might be looking for a donor advised fund, which then makes a donation over the next few years.

Another great planning opportunity is to encourage them to make a qualified charitable distribution (QCD) from their IRA.  This is available to donors over 70 1/2 years old.  They get to make a positive impact and reduce their taxable income!  There are qualifying requirements associated with this type of donation so make sure you encourage them to discuss it with their tax professional. 

Below is a checklist you can share with donors courtesy of the CPA Journal.  We encourage you look at these as opportunities for both your organization and your donors. 

Checklist for Charitable Giving


Have I identified property that I might give away?


Do I want to make a transfer to charity in lieu of receiving my required minimum distribution (RMD) for the year?


Have I determined my contribution limits for the year?


Have I obtained required appraisals?


Have I obtained required written acknowledgments for gifts of $250 or more?


Have I engaged a tax professional to draft a charitable trust?


Can I benefit from setting up a private foundation?


Have I provided for charitable donations in my will or trust to take effect upon my death?

Lori Sampson is a partner with Myers, Brettholtz & Company, PA and manages the accounting services department.  She has more than 25 years of experience in public and private accounting, and is the firm’s leading authority for QuickBooks support, aligning information technology with business objectives, and budgeting.

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