(Image: Tony Webster, Creative Commons)

The Republican Tax Cuts and Jobs Act of 2017 eliminated charitable tax deductions for millions of American taxpayers. As a result, donor numbers have fallen sharply. The Fundraising Effectiveness Project reports that the number of U.S. citizens contributing to charity dropped by 4.5 percent in 2018 and the retention of first time donors from the previous year fell by 14.9 percent.

These are sobering numbers. Nonprofits will have to eliminate programs or roll back services to cope with shrinking revenue. Considering that the federal government continues to pursue cuts to vital social services, this situation will push vulnerable communities into greater desperation and poverty.

The GOP’s tax bill demonstrates that government policy fundamentally influences how people donate to charitable causes. If the architecture of the Tax Cuts and Jobs Act had a negative impact on philanthropy, what kind of models might boost contributions?

The province of Quebec may have one answer.

To encourage charitable donations to organizations providing disaster relief in the aftermath of the 2010 earthquake in Haiti, officials in Quebec decided to permit taxpayers to claim deductions on their 2009 returns. Under typical circumstances, Quebec citizens would have had to wait until April 2011 to file deductions on gifts made in January 2010.

Officials sought to encourage people to give by making tax benefits more immediate, and it appears to have worked.

“Quebec tax payers gave more than taxpayers in the rest of Canada during this period,” claims a report by Ross Hickey, Bradley Minaker, and Abigail Payne. The three economists found that overall donations in Quebec—even those to causes other than disaster relief in Haiti—grew by 9 percent. Additionally, those who made charitable contributions gave more money than their peers throughout the rest of Canada.

There are no quick fixes for the problems that the nonprofit sector faces. But as Quebec’s experiment shows, elected officials can have a positive impact on charitable causes if they have the political courage to do so.


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