Non-profits fear new tax code will slash donations and donor base

Non-profits fear new tax code will cut donor base and donations
Updated: Dec. 19, 2017 at 8:42 PM HST
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HONOLULU (HawaiiNewsNow) - There are thousands of non-profit organizations in Hawaii that depend on charitable donations. Those donations will still be deductible under that nation's new tax code.

But because it will double the standard deduction to $12,000 for individuals and $24,000 for couples, charities fear taxpayers won't have the incentive to make donations to lower their tax bill.

"People with more wealth will actually be able to take advantage of it and small to middle income earners will not be able to enjoy that. Therefore, charitable deduction will suffer as a result," said Lisa Maruyama of the Hawaii Alliance of Nonprofit Organizations.

Charity groups estimate loses to non-profits up as much as $13 billion across America next year and a narrower field of potential donors.

But Tax Foundation of Hawaii's Tom Yamachika believes the change will actually help non-profits.

"I really don't see any impact because the bill does preserve the ability of people to deduct charitable contributions. And it even makes it a little sweeter because the percentage limits are increased," he said.

Hawaii Community Foundation's Thomas Kelly says Hawaii non-profits are understandably wary.

"Hawaii did cap charitable deductions in 2011 and we did see almost a 20 percent decrease in giving. So we know incentives matter," he said.

The Kidney Foundation of Hawaii fears the change will decrease the number of nicer cars donated to the Kidney Cars program for tax write offs.

Yamachika thinks many people will stil be prompted to help nonprofits.

"I hope people aren't dissuaded by the way the new tax code works," he said.

But Maruyama believes Hawaii charities will be forced to cut staff and services.

"It's kind of a perfect storm," she said. "There isn't enough revenue to go around. We're concerned there won't be enough revenue to make up those shortfalls."

Sen. Hirono also chimed in on the tax bill, voicing her opposition.

"The Republican tax bill is a scam. After months of empty promises to the middle class, the President has been caught in another big fat lie. This bill will not help the middle class. It is nothing more than a fulfillment of the Republican Party's mission to eventually gut Medicare, Medicaid, and Social Security to pay for trillions of dollars in tax cuts to the richest Americans and corporations. The American people will hold them accountable," Hirono said in a statement.

This story may be updated.

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