Gilded Giving: A Report from the Institute for Policy Studies
In July, the Institute for Policy Studies, a progressive organization dedicated to building a more equitable, ecologically sustainable, and peaceful society, issued “Gilded Giving 2022,” a report on how wealth inequality distorts philanthropy and imperils democracy. It’s an interesting read, and you can download it here, but some highlights that IJS pulls out of it include:
Fewer than half of all U.S. households now give to charity.
From 2000 to 2018, the most recent data available, the proportion of households giving to charity has dropped from 66 percent to just under 50 percent. These declines track indicators of economic insecurity such as employment, wages, and homeownership rates.
The share of households that claim charitable deductions fell significantly after sweeping tax reform in 2017.
Following the passage of the Tax Cuts and Jobs Act, the proportion of taxpayers who itemized their charitable giving fell from 25 percent in 2017 to just 10 percent after the bill took effect in 2018.
The effect stuck: just 9 percent of households claimed charitable deductions on their returns in 2019. These changes primarily affected middle-income and affluent households earning $50,000 to $400,000 per year.
Philanthropy is becoming increasingly top-heavy.
In the early 1990s, households earning $200,000 or more accounted for less than 25 percent of all charitable deductions. By 2019, the most recent year available, this group accounted for 67 percent.
The share of charitable deductions claimed by those at the top of the income scale has grown particularly quickly: households making over $1 million accounted for just 10 percent of charitable deductions in 1993 but accounted for 40 percent in 2019.
Linking to a survey in which their Charity Reform Initiative partnered with IPSOS, they further report on respondents thoughts on Donor-Advised Funds:
With more than $1.2 trillion in charitable contributions currently sitting on the sidelines, 69 percent of adults surveyed support a 10 percent payout requirement for foundations (up from the current 5 percent) and for DAFs (which currently have no payout requirement), even if this reduces the amount of money in foundations and DAFs in the future.
73 percent of respondents support requiring DAFs to make grants within 2 to 5 years of receiving donations.
These studies and surveys seem to indicate a growing support for the ACE Act currently before Congress which would variously impact the way that DAFs and private foundations payout their funds. Check out the report and the survey for more information.
As always, we will keep you updated on these discussions which are aimed at moving more funding directly into the community, something Stonewall’s Fund Partners do at rates far above the national averages.