The United States economy grew at an overall rate of 2.9 percent in 2018, missing the goal of three percent set by the Donald Trump administration, according to Reuters, but nonetheless the best rate since 2015, and higher than 2017’s rate of 2.2 percent. But even though the economy showed positive growth, Americans gave significantly less to charities last year, and a new study says that much of the blame goes to Trump.
More specifically, a new report released Tuesday by Giving USA — an independent group that monitors United States philanthropic activity — shows that the sweeping new Trump tax cut law passed by Congress in late 2017 and enthusiastically backed by Trump as “rocket fuel” for the U.S. economy, bears a large part of the blame for the new American stinginess, according to an analysis of the report by The Washington Post.
The 2018 drop marked the first year that overall charitable giving by Americans had dropped since the recession of 2008, according to The Post. Una Osili, an associate dean at the Indiana University Lilly Family School of Philanthropy — which takes part in producing the Giving USA report — called the drop in charitable giving “quite a widespread change.”
While charitable donations from corporations rose by 2.9 percent, and giving from philanthropic foundations increased by 4.7 percent, per a Raw Story summary of the report, most charitable donations come from individuals — and that is where the biggest drop was seen.
Individual donations to charitable organizations plunged by 3.4 percent for the first time since the 2008 financial crash, the report says. The reason? According to a Bloomberg News analysis of the Giving USA data, changes to the tax code as part of the Republican “Tax Cuts and Jobs Act of 2017” made it more difficult to claim charitable donations as tax deductions.
Donations from individuals account for approximately 75 percent of all charitable giving in the United States, so despite the increases in corporate and foundation giving, overall charitable donations took a 1.7 percent drop, according to the Bloomberg analysis.
By increasing the standard deduction, the tax law prevented millions of U.S. taxpayers from claiming itemized deductions on their tax returns. But without itemizing them, charitable donations would not be tax-deductible. The number of Americans itemizing in 2018 dropped to 18 million in 2018 from 46.5 million the year before, according to Bloomberg.
While charities had warned that the new Trump tax law would lead to a drop in giving, Trump and the bill’s Republican supporters claimed that increased economic growth would make up the difference, causing individuals to share their supposed newfound wealth with charities. But the projected level of growth did not materialize and, as The Inquisitr has reported, studies have shown that the while the Trump tax law benefited corporations, individuals — who account for the bulk of all charitable donations — have seen virtually no benefit.