In addition to the doubling of the
standard deduction, Congress also doubled the estate-tax exemption to $10 million. Some charitable-giving experts expect the tax code changes could reduce overall U.S. charitable giving by as much as 5 percent, Curtis says. “So, you could see a drop,” he says.
“On the other hand, what we know is that the economy really drives giving a lot. And, so, if people are feeling like they have some more money in their pockets, if the economy continues to be strong, they could really be more generous with their charitable giving.”
Hard to predict impact Sherrie Armstrong, president and
CEO of The Community Foundation Serving Richmond and Central Virginia, says it has benefited from “bequests where people had to give more money to charity through their estates after they passed away due to taxes on their family members.” The dramatic increase in the estate tax exemption, she says, could result in fewer bequests to the founda- tion. “But again, we’re not sure. We haven’t seen anything on that yet.” Geoffrey G. Hemphill, a tax attorney
with Norfolk-based Vandeventer Black LLP, says it’s far from clear what impact, if any, the tax overhaul will have. Not getting a tax benefit won’t stop his own charitable giving, Hemphill says, “and I suspect a lot of people are like that. I’m still going to give to my church, and I don’t care what the loss of a deduction is. … I always thought charity was a matter of the heart and not a matter of your personal wallet.” Michele A.W. McKinnon, a partner
with McGuireWoods in Richmond, chairs the law firm’s nonprofit and tax- exempt organizations industry team. She also thinks it’s premature to predict what effects the tax reforms will have. For starters, a lot of people who give
small donations to charities probably weren’t claiming those donations for deductions, she says. And millennials, she adds, don’t make charitable decisions based on taxes. “Younger generations are going to fund stuff because that’s what they believe in,” McKinnon says. “Look at crowdfunding and all that. That’s normally not deductible, and people are
Photos by Mark Rhodes
www.VirginiaBusiness.com VIRGINIA BUSINESS 33
McKinnon says that, in her experi-
ence, very few high net-worth donors “focus on the tax benefits. … High net- worth individuals are more interested in how to achieve a particular goal, and what they struggle with is finding an organization to help them, not taxes. That’s not what’s driving them. And I’ve seen that with my clients who give away lots of money — many of them can’t use the deduction because they’re maxed out.”
Fundraising consultant Keith Curtis says a strong economy may encourage people to be generous with charitable giving.
Data-collection initiative Even though it’s far from certain
what impact the new tax law will have on giving, nonprofits and foundations are watching the situation carefully and trying to be proactive. The Community Foundation for
more than willing to contribute to what they believe in.” As for wealthier donors making
large contributions, Armstrong points out that they still will itemize because their deductions will total more than $24,000: “I’m not sure it’s going to affect their giving,” she says. “I’m not anticipat- ing the change in giving there.”
Geoffrey G. Hemphill, a tax attorney with Norfolk-based Vande- venter Black LLP, says,"I always thought charity was a matter of the heart and not a matter of your personal wallet."
Northern Virginia, for example, is launching a data-collection initiative called Give Northern Virginia to track charitable giving. “We’ve invited every single nonprofit
we all know in the region to join,” Ells- worth says, adding that the group will collect information on 2018 charitable giving each quarter and track the changes from the previous year. Meanwhile, the United Way of
Southwest Virginia has been reaching out to its biggest donors.
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