In my most recent blog post, I identified five factors – technology, demographic shifts in the workforce, more mobile employees, a desire for choice in giving and the shifting social contract – as causing disruption in the nonprofit sector.
I published this blog just weeks before Congress passed one of the most comprehensive tax reform acts in history and, perhaps, the most important legislation in my lifetime as it relates to the non-profit sector and the highly regarded charitable deduction. There is much that has been written about the recent changes to the charitable deduction and how it may impact non-profit organizations. As of 2017, 30 percent of taxpayers itemized their charitable gifts, largely people in the highest tax brackets. An analysis conducted by the Tax Policy Center estimated that increasing the standard deduction would decrease that number of itemizers to 5 percent. The potential impact of this is $169 million in charitable giving from Missouri residents and $431 million in charitable giving from Illinois residents.
As the legislation passed, I thought about the many discussions that I’ve had about what motivates people to invest in charitable causes. I grew up in the foster care system, and what motivates me to fight for the positive development of young people is not a tax write off. I believe this is true for many who have been impacted directly or moved to action by a sense of higher purpose. This past week, I met a man who is passionate about ALS because his father passed away from the disease. I recently met a woman who is passionate about leadership programs for girls because she herself was a Scout. I talked to a person on Sunday morning who is driven by his faith to use his influence and ensure people in more socially challenged countries have access to education and sports.
It is true that the nonprofit sector has been disrupted. It is true that we live in a radically individualistic world. In the midst of this structural change to giving, our challenge is to continue to do our mission-aligned work, invite those in who are motivated by purpose and tell the stories of lives changed.