Consider donating before the new tax law in effect
The country's tax laws are on the verge of massive changes. As a result, some of us will see our taxes go up and some will see our taxes go down. However, a sector of the economy that could be a real loser is the nonprofit sector.
One of the heralded benefits of the new tax plan is the increase in the standard deduction. This will eliminate the need for many more Americans to itemize their deductions since the new standard deduction will be larger than the sum of their individual itemized deductions - including gifts to charities. For those people, there will be no additional benefit to giving an additional dollar to a nonprofit.
We live in a generous society. Americans will always give to charities whose missions they hold dear. However, without the additional tax incentive, I think we can expect to see charitable gifts going down in future years.
There are some things donors can do now before the new tax laws take effect Jan. 1. Consider making an additional gift to your favorite charity before the end of the year.
Since many of us will be itemizing our deductions on our 2017 taxes, we will still see the tax benefit of these gifts. If you do not have a particular charity you want to support with a gift this year, consider establishing a donor-advised fund with an organization like the Delaware Community Foundation. This will allow you to take the tax deduction this year and decide in the future which actual nonprofits will benefit from your generosity.
Nonprofits are an essential part of Delaware. Among many other things, they provide needed social services, promote the arts and help animals. Let's make sure no matter how the tax laws change, we always remember the important role nonprofits play in all our lives.
William R. Allan
senior vice president for Southern Delaware,
Delaware Community Foundation