When the Obama Administration released their budget proposals earlier this year, one area caught many non-profits (including Camp Anokijig) by surprise. It was a plan to limit the deductions that some individuals and couples could claim on their charitable gifts. While this change would not affect most of Anokijig's donors, it could impact most of Anokijig's donations. How could this be the case?
The proposed changes in the tax law would only impact taxpayers in the very top tax brackets, so it's a relatively small percentage of individuals. However, this small percentage of individuals accounts for a big percentage of giving. For many years, non-profits have recognized an "80/20 trend." This trend recognizes that 80% of an organization's donations come from just 20% of their donors (some groups see this percentage trending closer to 90/10). As Anokijig has moved into it's fourth season as an independent camp, we have also witnessed this trend emerge in our own donor base.
While this 20% segment of our donors are very likely to be impacted by this proposed change in legislation, the degree to which this might influence their giving to Anokijig and other non-profits is unknown. Some estimates put figures as low as a 1.2% decrease in giving, but even that number is a significant amount for Anokijig's bottom line.
Fortunately, this provision didn't have much support in either the House or Senate and both groups left it out of their respective budget resolutions, which are the blueprints for tax and spending bills to be taken up by Congress. That doesn't mean this idea is dead and we could see it surface again in future legislation. Keep your fingers crossed that we don't hear about any future tax proposals involving non-profits, unless they encourage giving.