A new national study shows six out of ten charitable donors in the US believe American giving will drop if donations to non-profit organizations are no longer tax deductible, including one-third who feel giving will decrease a lot. Even so, only half of all donors believe charitable gifts should be fully tax deductible.
The Donor Mindset Study: Exploring Attitudes Behind the Charitable Tax Deduction
The words “your donation is tax deductible” is often music to a donor’s ears. While receiving a tax reduction is not the only incentive for most donors it is always nice to see charitable contributions pay off when tax season comes around.
But how would giving change if the charitable tax deduction was eliminated? 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.
There is still a great deal of uncertainty on how exactly society’s charitable giving habits will change as new policies come into place. One thing for sure is that none of these findings bode well for any non-profit organization whose very existence is dependent on donors who are incentivized to give by the charitable tax deductions.
Op4G and Grey Matter Research jointly point 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.
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The study is representative of U.S. adults aged 18+ and is balanced to census on seven key demographics: Gender, State/Region, Age, Income, Ethnicity, Household Size, Household Income, and Education. Demographics were carefully tracked and weighted to ensure appropriate representation and accuracy. The study was conducted on the Op4G panel.
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. If you are interested in joining the Opinions 4 Good panel or signing up a non-profit to benefit from donated survey incentives please email [email protected] or click here.
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.