Giving Compass’ Take:
• The Lilly Family School of Philanthropy and Americans for the Arts share their plan to collect data to quickly identify the impacts of the 2017 tax law on nonprofits so that they can be addressed.
• How can funders work together to ensure that nonprofits do not suffer regardless of tax law?
• Learn why the 2017 tax law may hurt nonprofits.
Tax policy work is highly dependent on access to good data. Yet, one of the challenges is that the most robust research studies have data lags of 2-3 years (time needed for data collection, analysis, and publication). Waiting until 2022 for game-changing data is simply too long to wait.
To address the timeliness issue, the Lilly Family School of Philanthropy and Americans for the Arts have designed a research solution that will bring reliable data to the table within a single year of deployment. It is built around a national panel study of 2,000 nonprofit organizations representing the full range of size, subsectors, and geographic regions. We will track key fundraising metrics and pair those with a qualitative on-the-ground perspective about shifts in contributions by individuals, changes in demand for services, and the ability to meet that demand. In other words: Real people at real organizations telling real stories about the impact of the tax law changes.
Our aggressive goal is to begin this work in 2020. When the evidence about the effects of TCJA on charitable contributions arrives more quickly, advocates and policy experts can begin working on solutions sooner. Success will be nonprofit and community leaders visiting their legislator with strong data to say: “Senator, TCJA was detrimental to nonprofits. We have examples of what changed, and this is the data that demonstrates it. Let me tell you a story about the impact on your community. Here are policy alternatives to remediate the situation.”
The right to a tax deduction for a charitable contribution was a bedrock principle for 100 years in the United States and it shaped generational patterns of behavior incentivizing philanthropy. TCJA, however, has created a near perfect storm that could be deeply damaging to a nonprofit sector whose resource infrastructure is inherently fragile. We look forward to not only preserving but strengthening our nonprofit sector. Stay tuned as we hope you’ll join us in the undertaking.
Read the full article about addressing the impact of the 2017 tax law on nonprofits by Mr. Randy I. Cohen and Dr. Patrick Rooney at Americans for the Arts.
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