Three in four donors responded to new tax laws by choosing the standard deduction last year instead of itemizing their charitable deductions. This revelation comes from an April survey of 630 US donors sponsored by Dunham+Company.

Itemizing All Deductions

Conducted by Campbell Rinker, the study also showed donors earning $75,000+ annually itemized deductions more often (29 percent vs. ~18 percent). This move may have implications for how donors plan their year-end giving. It may also impact how charities plan their strategic communications to donors.

Responding to new tax laws, the percentage of $2,500+ donors who always itemize deductions decreased from 59 percent in August 2018 to 41 percent in April 2020.  The share of itemizers dropped from 42 percent to 34 percent since August 2018 among donors giving $500-$2,499 annually.

Itemizing Charitable Gifts

The share of donors giving $2,500+ annually who always itemize charitable giving deductions fell from 64 percent in August 2018 to 44 percent in April 2020.  For households giving $500-$2,499 annually, this rate dropped for from 38 percent in 2018 to 31 percent in 2020. Analysts see this as a direct response to the new tax laws.

At the time of the study, the stock market had recently seen significant losses. Analysts generally attributed these to the COVID-19 pandemic lockdown and an oil price war between Russia and Saudi Arabia. Accordingly, donors in households earning $75,000 or more annually were likelier than those earning less to say investment performance had negatively impacted their giving (28 percent vs. 18 percent).

Methodology: This online poll of 630 US adult donors who had made charitable gifts of at least $20 in 2019 was conducted April 17-20, 2020 – the height of the worldwide COVID-19 pandemic.  The lowest amount given in 2019 was $20, and the highest was $66,500.  Analysts weighted the responses by age to reflect the general U.S. population per the American Community Survey of the US Census. The margin of error is ±3.9 percent at the 95 percent confidence level.