by Mark Jones

Seemingly, we can’t go anywhere without hearing about the looming “fiscal cliff” and various potential consequences of what may happen if Congress doesn’t act. Plus, we don’t know exactly what may come out of last-minute negotiations. So how is this situation impacting donors and their decision to give?

According to the Wall Street Journal, many wealthy Americans have begun to give to donor-advised funds (DAF) at record rates, starting in the third quarter of 2012, to avoid potential increased taxes. By using a DAF, a donor receives the tax deduction at the time of the contribution but can decide how to distribute the funds to qualified nonprofits at a later date. What has been reported is that many wealthy donors may wait until 2013 to distribute donated funds. This may mean greater income coming in the final weeks of 2012 or during 2013 than in prior years. Some evangelical nonprofits have reported seeing bigger gifts than last year.

On the other hand, for many other Americans, the uncertainty is causing fear. Many individuals are afraid to make any move, so they are holding on to what they have and feeling paralyzed by the uncertainty. This, along with continued concern over the growth in the economy, has led many Americans to be cautious with expenditures and giving.

According to a poll conducted by the United Way Worldwide, without charitable tax incentives, 30% of Americans would reduce their charitable donations.

So what are you seeing at your ministry? Have you seen an increase in donations? Are stock donations up? Are some of your faithful year-end donors staying on the sidelines?

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  1. Mark Jones @ 2013-01-09 11:06

    For my church, we experienced mostly positive results in 2012. Our December giving exceeded our expectations but I don’t know that it was because of the fiscal cliff. Overall, we saw a 5.9% increase in our general fund giving for the year over 2011. The only negative that we saw was a small decline in our giving units for the year. So the average gift from our donors who gave incrased by 8.5%.

  2. Mark Simmons @ 2013-02-01 17:30

    Well now we know what the Federal Government did. Now we need to figure out the impact.

    The term “Fiscal Cliff” was coined by Fed Chairman Ben Bernanke and referred to his concern that a $550 billion tax hike was going to trigger another recession. Hard to imagine that a $660 billion tax hike (what they settled on) targeted even more toward job creators won’t do the same. At least the CBO and none of the major economists who predicted another recession have changed their minds after the passage of this bill. If this happens, more people out of work will of course have some impact on giving.

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