Payroll Tax Increase Expected to Suppress Charitable Giving

By Cynthia Price, Director of Communications

infographic on charitable giving

Click to view the full graphic.

I’ve noticed my paycheck is a bit smaller with the return of the 6.2 percent payroll tax, a 2 percent increase over the 4.2 percent rate we’ve experienced for the past two years. I’d already identified and committed to my charities this year, so it’s not going to change my giving levels, although I may have to see fewer movies or cut back on my coffee shop visits.

At ChildFund, we were curious as to what Americans might say when asked whether the tax increase would impact their giving. Today, we release a survey conducted for ChildFund by Ipsos Public Affairs.

Here’s what we found:

  • 20 percent will reduce their charitable giving by an average of 29 percent.
  • 21 percent will not give at all to charity in the coming year.
  • 54 percent will continue to make charitable donations at the same level.
  • 6 percent anticipate giving more.

“While there is some good news in these findings, the survey results suggest a challenging year ahead, in what already has been a demanding fundraising climate,” says Tereza Byrne, ChildFund’s chief development officer.

“Nonprofit organizations like ChildFund can take comfort in the fact that six in 10 Americans will either maintain or increase their charitable giving,” she adds. “What is alarming, however, is the anticipated decrease in contributions by as many as one in five givers. If that comes to pass, it will likely have broad-reaching consequences across the nonprofit landscape.”

Study Reveals Americans’ Views on Poverty

Helping the world’s poor children should be a top priority, according to a national telephone survey commissioned by ChildFund International.

“It is heartening, especially in light of a challenging economy, to see that so many Americans recognize the plight of millions of children around the world whose needs are so great,” observes ChildFund President and CEO Anne Lynam Goddard.

The telephone survey of 1,000 randomly selected Americans was conducted by Ispos Public Affairs in December.

An overwhelming number of Americans (66 percent) believes that the United States has an obligation to help poor children around the world. Almost one third (31 percent) think that aid to the globe’s poorest children should be our nation’s number one charitable priority.

The survey revealed a varying spectrum of awareness about conditions affecting poor children around the world. On average, Americans rightly estimated that 47 percent of the world’s children live in poverty, with two in three (66 percent) survey respondents correctly identifying malnutrition as the single largest cause of death, outside of trauma, for children under 5 years of age.

Americans are backing up their convictions with their pocketbooks. Among those surveyed, 62 percent say they have donated to an international relief agency.

ChildFund plans to conduct the study annually.

To read the survey results, visit our Web site.

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