Working Together for the Greater Good
By Natalie-Claire Woods Lyda
Last year brought critical changes to the U.S. nonprofit and foundation industry in the form of sweeping changes to tax laws—changes that pose a serious threat to our nation’s philanthropic establishments.
The National Council of Nonprofits recently issued some guidance, which states “Most analysts predict that overall donations to charitable nonprofits will be lower because of four changes in the new tax law: (1) Individual income tax rates will be lower, which reduces the value of all deductions; (2) State and local tax deductions are capped at $10,000, which will reduce the number of taxpayers who itemize; (3) The law doubles the standard deduction, which also reduces the number of itemizers; and (4) The new law doubles the exemption on estate taxes, which may make the tax-advantages of some bequests less attractive.”
Where an estimated eighty-three percent of taxpayers once donated to charity, we are now facing about half of that number—only forty-four percent are predicted to donate at all this year, with 30-million individuals not itemizing the deduction. But there is a silver lining. Because charitable giving limits have been doubled, those who are financially able to give more are actually predicted to give twice as much in order to reach that deduction maximum.
The Indiana University School of Philanthropy and Independent Sector has placed a dollar amount on the impact that this law is predicted to have on charitable giving. The 1.7-4.6 percent decrease in donations translates to an overall loss of $4.9-13.1 billion in the nonprofit realm.
So what does this mean for The Junior League of Atlanta, Inc. (JLA) and its nonprofit community partners? More collaboration. Areas likely to come in to play for collaborations will be technology, research, best practices and trainings. Every group will need to stretch their dollar further because their largest donor base—the middle-class earner—could shrink significantly.
Collaboration is nothing new to JLA. The organization hosts free capacity building workshops throughout the year that bring our nonprofit partners together to share and learn ideas that expand their ability to serve. In addition, our annual community partner evaluation process requests that applications reflect collaboration on items ranging from dollars to volunteers to specific training opportunities. Finally, JLA’s million-dollar Centennial Grant gifts awarded in 2016 to the Atlanta Community Food Bank, Atlanta Legal Aid Society, Georgia Heirs Property Law Center, Pro Bono Partnership of Atlanta and Children’s Healthcare of Atlanta have sparked growth, increased the numbers of those assisted by the organizations and have encouraged collaboration for years to come.
Many possible causes exist for the exponential increase in the collaborative efforts of nonprofits, but the following benefit remains: synergy between organizations with similar goals and missions almost always provides a better outcome for the entire community.