President Obama's recently released 2010 budget has created some concern among the non-profit community. The budget scales back the tax deduction those earning more than $250,000 can take for their charitable giving from 33-35% to around 28% (See our Giving Calculator).
This could be unsettling news for charities who have already been hard hit due to the current economic conditions. Some believe that the drop in the tax deduction rate coupled with an increase in the top income tax bracket will ultimately lead to less charitable contributions. Others argue that the tax deduction is ultimately a small reason why many give to charity. And that even with the lowered tax deduction they will still give as they have in the past.
The data that we have seen over the years has shown a big spike in donations through our site during the last several days of the year, especially on December 31st which of course is the last day to make a qualified tax deductible charitable contribution (see our Tax Benefits of Giving article). This data indicates to us that the tax benefits really do motivate people to donate.
We would like to know your thoughts on how the change in tax benefits may lead to a change in your charitable contributions. Would the decrease in the tax benefits affect your giving?