The caring hearts of those living in Central Kansas never disappoint United Way of Central Kansas Executive Director Gaila Demel.
“In a small community, people are so ultra generous,” she said. “It’s such a humbling feeling.”
This is an important time of year for the United Way and the myriad other non-profit agencies that rely on donations. Many folks are starting to work on their taxes and pondering deductions for those gifts. But, changes in the tax law may make it less attractive to donate.
In general, the act, enacted at the end of 2017, reformed the individual and corporate income tax codes and simplifying the tax code. It also retained the charitable contribution deduction, but the standard deduction and limits on itemized deductions were increased.
This could decrease the number of taxpayers who itemize, thus reducing the number of people who can deduct charitable donations, according to an analysis by the Tax Policy Center of the Urban Institute and Brookings Institution.
“The reduction in individual marginal income tax rates and the increase in the estate tax exemption also diminish incentives for charitable giving,” the TPC report reads.
“We value our Pacesetters,” Demel said of the UWCK’s top 15 donors. And, “we value all of our donors.”
Still, she realizes she is not alone and there are other agencies and organizations seeking funds from the same pool. “We all want the same dollar.”
By the numbers
The number of households who claim a charitable contributions deductions will fall from 37 million to 16 million in 2018, or from 21 percent of tax units to 9 percent, according to the TPC analysis. Those who continue to itemize are likely to be those with the highest incomes, who are also likely to give the most to charities.
“Thus, charities may lose smaller but meaningful donations from millions of moderate-income households, but experience a less substantial change in aggregate donations,” the center notes. It estimates that new law will reduce charitable giving by about 5 percent.
The tax overhaul may also change the composition of donations since wealthier individuals tend to give large gifts to museums and universities, while smaller donations by middle-income individuals tend to be targeted more towards social service agencies and religious organizations.
So, those who give a few dollars here and there are the ones who may fall away. “We hope they still see the value in what we do to support our partner agencies and the counties we serve,” Demel said.
Understanding the need
Demel said she feels fortunate.
According to nonprofitsource.com, 30 percent of annual charitable giving occurs in December, of that, 10 percent occurs on the last three days of the year. But the UWCK gets a jump on this, with September and October being its biggest months.
So far, since the UWCK kicked off its annual campaign in August, it has raised nearly half of its $275,000 goal. This goes to the 23 agencies supported locally by the United Way.
However, those final target-topping gifts are crucial to the campaigns success.
None the less, Demel is optimistic. “The nonprofit arena is so recognizable in our community.”
“In small communities, people are aware of those in need,” she said. “The people we know are those we want to help.”