Charitable giving in 2013 is slated to increase only 1.6 percent compared with last year, a bleak figure that will likely decline further if charitable deductions are diminished or eliminated, a new report forecasts.
The Atlas of Giving, which offers monthly charitable giving results and forecasts, concluded that the giving sector will see such a measly rise in donations because of a number economic factors, including a decline in consumer confidence, poor forecasts for investment markets and home prices, increase in security tax and a high unemployment rate.
“When consumers are feeling good, when they feel like they have disposable income, that’s where a good bit of giving comes from,” Rob Mitchell, CEO of the Atlas of Giving told The Huffington Post.
The projection appears particularly discouraging considering that giving increased by 6.7 percent in 2012 compared with the previous year.
But part of what bolstered charitable giving in 2012, according to Mitchell, was the return of the “uber gift.” He pointed out that big-name donors, like Mark Zuckerberg who gave nearly $500 million in Facebook stock, were partially motivated by favorable tax deductions, the fate of which remains uncertain.
The tax laws passed by Congress on New Year’s Day now reduce the value of all itemized deductions for individuals making more than $250,000 and married couples making more than $300,000. But nonprofits fear that they'll be hit with more sweeping limits on deductions as Congress continues to try to make the tax code more transparent.
Atlas of Giving didn’t account for the potential changes in deductions in its forecast, since it’s unclear what the future holds. But Mitchell told The Huffington Post that more limits will have a “huge detrimental effect,” causing the increase in giving to be less than the organization originally predicted.
But Mitchell noted that there are some bright spots in the forecast.
For example, the environmental sector, which only accounts for 2 percent of the charitable “pie,” will see a 5.9 percent increase this year –- a boon Mitchell credits to increased awareness.
“More and more people are genuinely concerned about the issue,” he told The Huffington Post. “More people are voting their concerns with their dollars.”