With President Trump's signing of the $1.5 trillion tax bill, UNICEF USA is taking stock of the impact the sweeping overhaul to the US tax code could have on the world’s most vulnerable children.
US Tax Law Changes Key Takeaways:
- Percentage limit for cash donations by individuals to public charities like UNICEF increases from 50% to 60%
- To maximize the tax benefits, donors should choose to donate to 501(c)(3) nonprofits
- Giving now is more important than ever
When a draft of the bill was published on Friday evening, The Chronicle of Philanthropy quoted charitable advocates’ estimates that charitable giving could drop by as much as $20 billion a year: "The changes proposed in the tax code would fundamentally weaken the ability of charitable organizations to raise money, provide services, and benefit our communities," wrote Dan Cardinali, president of Independent Sector; Tim Delaney, president of the National Council of Nonprofits; and Vikki Spruill, president of the Council on Foundations, in a joint statement.
One major concern: The tax plan nearly doubles the standard deduction for individuals and families. That makes good on the President’s promise to simplify the tax code — a more generous standard deduction could save many Americans money without having to go through the painstaking process of itemizing.
The changes in the tax code weaken the ability of charitable organizations to raise money, provide services and benefit our communities.
However, for individuals who are accustomed to deducting their charitable donations to organizations like UNICEF, things have grown more complicated.
While sobering, the news is far from all bad. CNBC reported in early December that speculation about the new tax law had many people looking to give generously and quickly before any changes could kick in.
"We're having a lot of advisors and clients talk to us about bringing their giving forward, giving … enough money [this year] so they can maximize their tax deduction and fund multiple years of giving in the future," Kim Laughton, president of Schwab Charitable, told CNBC.
Furthermore, the charitable deductions aren’t going away. In fact, Forbes reports that the rules governing charitable donations are remaining largely the same with just a few changes — one of which is actually good for charities. The percentage limit for cash donations by an individual taxpayer to public charities and certain other organizations increases from 50% to 60%.
What does it all mean?
The short answer: "If you're no longer going to be itemizing deductions, then you might maximize your charitable contributions before year's end," Kathy Pickering, executive director of the Tax Institute at H&R Block, recently told USA Today.
If you want to reap the tax benefits of giving, make sure that your donations are going to tax-exempt organizations, such as UNICEF. These include 501(c)(3) nonprofits, churches and other religious organization, among others.
Another tactic some people are considering, according to The New York Times, is “bunching,” which means doubling up on contributions in one year in order to beat the standard deduction and cut their tax bill through itemization.
For individuals who support causes, the tactic frees them up to continue being generous while also saving money on their taxes.
The problem, however, is that organizations like UNICEF require continual support to meet not just the daily needs of the world’s most vulnerable children. When disaster strikes, like the recent hurricanes that crippled Houston and Puerto Rico, and humanitarian crises in places like Syria and Yemen, continue to threaten children’s lives, mobilization requires a steady stream of support.
Giving now is more important than ever
That is the biggest reason of all to keep giving. When disaster strikes, putting children in harm’s way, UNICEF is among the first organizations to go into trouble spots and the last to leave.
Around the world, natural disasters, refugee crises, conflict and famine are putting more lives in jeopardy every day. In 2016 alone, UNICEF responded to 344 humanitarian emergencies. 117 were natural disasters. This year is no different. With its 70-year history of being in the right place at the right time, UNICEF's global network of staff and volunteers is ready at a moment's notice to provide much-needed food, shelter and counseling, working in tandem with local governments and other relief organizations
While the tax overhaul will spark sweeping changes, what remains the same is the desperate straits facing children who live in the world’s toughest places — and UNICEF’s unbending commitment to their survival.
UNICEF USA helps children in emergencies while consistently receiving high ratings from Charity Navigator for transparency, accountability and administration. UNICEF USA also meets the Standards for Charity Accountability of the Better Business Bureau's Wise Giving Alliance. UNICEF USA's financial documents are readily available. UNICEF is in the top tier of nonprofit organizations nationwide. To help UNICEF respond to emergencies across the globe and give children hope, click here.
Top Photo: It took three months, but thanks to UNICEF, Haiti's children whose schools Hurrican Mathew destroyed finally got back to learning. ©UNICEF/UN047287/Bradley