On Christmas Eve, The Washington Post found another reason to suggest the Trump tax cut was a terrible policy: Middle-class people would stop giving to charity. That’s a bit insulting, to insist that most Americans only donate to get a tax break. Under the headline “Tax law could crunch charities, “ Post reporter Todd C. Frankel warned:
Many U.S. charities are worried the tax overhaul bill signed by President Trump on Friday could spur a landmark shift in philanthropy, speeding along the decline of middle-class donors and transforming charitable giftgiving into a pursuit largely left to the wealthy.
The source of concern is how the tax bill is expected to sharply reduce the number of taxpayers who qualify for the charitable tax deduction - a big driver of gifts to nonprofits. One study predicts that donations will fall by at least $13 billion, about 4.5 percent, next year.
The study came from a lobbying group for philanthropies called Independent Sector. (It should be called Liberal Sector.) Their ardent lobbying against the tax cut was featured in the Frankel article:
That could create new winners and losers in philanthropy. Nonprofits have long noticed that the wealthy are more likely to cut big checks to support museums and universities, while smaller donors tend to give to social-service agencies and religious organizations. Charities fear that this shift could change how the public views donating and alter the priorities of nonprofits.
"The tax code is now poised to de-incentivize the heart of civic action in America," said Dan Cardinali, president of Independent Sector, a public-policy group for charities, foundations and corporate giving programs. "It's deeply disturbing."
The tax bill's treatment of charities led the Salvation Army to express serious concerns, and it's why United Way opposed the legislation, as did the U.S. Conference of Catholic Bishops. Cardinali's group turned its home page - normally a place for a feel-good story - into a call to protest, with the banner headline: "KILL THE TAX REFORM BILL."
Now that they lost, the Independent Sector website insists "THE FIGHT IS NOT OVER." Cardinali lamely insists "Together, we demonstrated the power that a strong, unified nonprofit voice can wield in public policy." No, you lost.
Pretty much every source in the Post story matched their liberal narrative: The United Way, The Salvation Army, an Indiana University group aligned with Independent Sector, and the Urban Institute:
The Republican tax changes come at a time when charities are already worried about the fate of small donors.
"That's a trend that has mirrored wealth inequality -- the skewing of giving towards fewer but larger donations," said Benjamin Soskis, research associate at the Urban Institute's Center on Nonprofits and Philanthropy.
The new tax code further reduces the privileged status of charitable gifts, treating them the same as purchases from Walmart for the vast majority of taxpayers.
"The government has always seen fit to reward the goodness of Americans with a tax incentive," said Lt. Col. Ron Busroe, development secretary at the Salvation Army. "Now that's being taken away."
This report from the "reality-based media" could be defined as "fake news" in two ways: that every source in the story sounds the same note, so they make a neat liberal press release; and that all "news" about projections and predictions is not based on facts, but on guesswork.
Frankel's sources tried to express their faith that middle-class people would still donate, but their anxiety over middle-class selfishness permeated every quote. The Post story was illustrated with a photo of a red Salvation Army kettle, and the Post reported they raise $150 million a year from those small donations. Now how many middle-class Americans ask the person at the kettle for a receipt for their taxes?
