Nonprofits hoping for a reason to celebrate on New Year’s Eve

The holiday giving season has not been very fruitful this year for some Fresno nonprofits, and their leaders hope the specter of tighter tax laws in 2018 will spur end-of-the-year donations intended to wring the last bit of federal deductions.

Charities count on a bump in giving in November and December to bolster their budgets, but this year donations of toys for children and money for organizations to feed, clothe and house the needy have been down.

More volunteers rang bells at Salvation Army kettles in Fresno, but donations were down 8 percent from last year. Fresno County Toys for Tots got about half the number of toys placed in barrels for giveaway – although the toys donated were more expensive – compared with last year. And contributions to Catholic Charities fell short of the 2016 standard by about $90,000.

The charities are hoping for a New Year’s Eve miracle: And they believe the Tax Cuts and Jobs Act, which preserves the charitable deduction but experts say will result in fewer taxpayers itemizing deductions in 2018, could be the vehicle to deliver that.

“I have spoken to a couple of people who say, ‘You’re going to have a mad rush at the end of this year from people trying to get a tax break. And I’m waiting for it,’” said Kelly Lilles, executive director of Catholic Charities in Fresno.

Sunday deadline

Donations either delivered or mailed by the end of the year can be deducted for 2017.

The new tax law effectively doubles the standard deduction to $24,000 for a married couple and $12,000 for a single individual, which will eliminate itemizing deductions for many taxpayers who do not have enough interest or other items for itemizing to make sense. Currently, donations can only be deducted if the taxpayer itemizes.

Tax rates will go down slightly for individuals and so the benefits from donations could be less next year. And the deduction for state, local income and property taxes will be capped at $10,000 – leaving some taxpayers who have benefited from that deduction with less money to give to charity.

Wayne Boos, a certified public accountant in Fresno, said it will be beneficial for people who itemize in 2017 to make charitable contributions before the end of the year. But he has not seen any more than the usual last-minute push by taxpayers who want to make donations for tax deduction purposes.

The potential for the Tax Cuts and Job Act to affect charitable giving in 2018 is another concern, Boos said. It likely will affect nonprofits, but he’s not sure of the impact. “I haven’t heard anyone say they’re going to quit giving,” he said.

Reductions expected in 2018

Nationwide, the nonprofit sector is anticipating a 5 percent to 10 percent reduction overall in charitable giving in 2018, said Lindsay Callahan, president and CEO of the United Way Fresno and Madera Counties. A 10 percent reduction in donations could be a devastating loss for organizations that are already struggling, she said.

Callahan said she has not heard of any Fresno County organizations having a decrease in charitable giving this holiday season, but she would hope people would give generously now to help offset the potential of a reduction in donations next year. “You have this incredible storm coming,” she said. “Individual giving may be down and the federal support for the safety net is going down and shifting.”

The decrease in donations this holiday season is perplexing, considering the national economy has improved and unemployment is low, but Major Carole Abella of the Salvation Army in Fresno said finances remain tight for many. And donors who normally support local charities may be giving to help family or other victims of recent national disasters, including floods in Houston and Puerto Rico and fires in Northern and Southern California, she said.

The 8 percent decrease in kettle donations is significant for the Salvation Army, Abella said. “Any time you have less money that you’re able to use it’s going to have some effect on your services somewhere.”

Donations also were down to the Salvation Army’s “Angel Tree,” which provides children with Christmas gifts. “We saw an increase in those who selected angels,” she said. “But the number of toys provided for each child decreased. We had to subsidize with more toys.”

Abella is grateful for the volunteers who manned the kettles, for those who donated cash and bought toys for children. “We were able to help over 700 households with food boxes and that’s just for Fresno. That doesn’t include what was out of Clovis,” she said. Salvation Army provided toys for nearly 2,000 children, and in some cases clothing, too, she said.

Making up the difference

The national Toys for Tots organization gave Fresno County $80,000 to offset the reduction in toys donated for its annual toy drive, said Virginia Cardinal, co-coordinator in Fresno County.

Fresno County needed to collect nearly 40,000 toys and another 2,100 for children on a wait-list to meet the need this year, Cardinal said. “We have a name (of a child) to go with every toy, so how do we pick and choose? We had to make this work,” she said.

Catholic Charities relies mostly on personal donations to provide food and other necessities for people in the community. End-of-year donations were $240,000 last year and, as of Dec. 28, were $150,000 this year.

Lilles is surprised that donations are down. “We were very optimistic because we kept thinking the economy is doing well,” she said. “I still don’t know if people are still just waiting to write their checks on Dec. 31. We’re praying that’s what it is.”

But the charity will survive, Lilles said.“I just keep giving it to my faith. ‘OK, God, you have taken care of us in the past. We’ve gone through droughts, tax changes, the economy, unemployment, recessions … and you’ve taken care of us.’”

Abella said the Salvation Army will make its budget work. “The work goes on,” she said.

It’s not doomsday for nonprofits. “At the end of the day, we do have to serve basic needs; we do have to find ways for people to have food and housing,” said the United Way’s Callahan. “This is the time for public and private organizations to come together and say, ‘How can we do the most and the best good for the community.’”

And her advice for people who want to help local charitable organizations: “Make an electronic payment if you can or make sure you get that check in the mail now and not wait until Dec. 31.”

This story was originally published December 29, 2017 at 7:30 AM with the headline "Nonprofits hoping for a reason to celebrate on New Year’s Eve."