How could tax reforms impact charities and nonprofits?

With a higher standard deduction for most taxpayers, the average U.S. citizen might see some benefit from President Trump’s new tax plan.


Perhaps the most controversial president in U.S. history, President Trump is gearing up to introduce tax reform across the country. In the wake of Hurricanes Irma and Harvey, Trump seems to have taken these natural disasters as opportunities to discuss tax reform again. While some organizations, including our nation’s top automakers, are praising Trump’s new plan, those who operate in the nonprofit or charitable sectors might see fewer donations as a result. Some estimates predict that we’ll lose more than $17 billion in charitable giving under the proposed tax reform.

But the new plan isn’t as cut-and-dry as it seems. With a higher standard deduction for most taxpayers, the average U.S. citizen might see some benefit from President Trump’s new tax plan. Under the proposal, standard deductions will increase from $6,350 to $12,700 for individuals and from $12,700 to $25,500 for those who file jointly. Unfortunately, some experts believe this will lead to less charitable giving across the board.

Community Services

Many neighborhoods rely on the services offered throughout their community. Since most of these organizations use public and private donations to operate, some might be forced to close their doors in the wake of President Trump’s new tax plan.

Leaders with, a nonprofit that specializes in global markets and commerce, were initially worried about widespread market destabilization as a result of the Trump presidency. Liz Baker, executive director with, made it clear that increasing importation costs will likely result in the de-funding of some of their current programming.

Other officials are worried about job loss throughout the community, which could devastate some of the smaller neighborhoods across our country. While some attribute a declining job market to increased automation in the workplace, some forecasts predict that 5 million importing and exporting jobs could be affected during an international market destabilization.


Hospitals and healthcare facilities in the nonprofit sector will also take a hit from Trump’s proposed tax plan. Although the current Internal Revenue Code, or IRC, hasn’t seen any major updates since the mid-80s, this could all change in the coming months or years.

Apart from the general decline in charitable donations from individual taxpayers, the increased standard deduction that is a part of President Trump’s strategy could put a damper on contributions in other ways. Eliminating the federal estate tax could reduce charitable requests across the board while reducing the overall number of tax brackets might introduce any number of new roadblocks or challenges in the future.

The new tax proposals aren’t even the only threats faced by the nonprofit healthcare sector. More than $32 million in funding was withheld from the United Nations’ Population Fund, which assists with family planning and maternal health. Trump has also remained silent about USAID, a program that offers similar services on an international level. USAID has relied on federal funding to operate efficiently and securely around the globe.

Renewable Energy

Nonprofits in the renewable energy sector are also targets of the Trump administration. The president’s earliest moves are threatening to cut federal subsidies for renewable energy sources like solar and wind. Nonprofit organizations have relied on these subsidies for the past decade or more. A total of 62 programs in the EPA will likely be cut to accommodate Trump’s budget, including the State Energy Program, the Advanced Research Projects Agency-Energy and the Clean Power Plan. Other programs on the chopping block include the Title 17 Innovative Technology Loan Guarantee Program, the Advanced Technology Vehicle Manufacturing Program, Weatherization Assistance Program and more.

The good news is that some experts in the renewable energy sector believe solar energy is here to stay. With or without the help of federal subsidies, these officials are confident that solar and other forms of renewable energy will continue to replace fossil fuels like coal and oil. They credit additional tax credits and incentives that are increasingly seen on the state level.

How You Can Help

Although a higher standard deduction makes it easy to forego your charitable donations, many of these nonprofit organizations wouldn’t exist today if it weren’t for the financial contributions of individuals like you. Couple this with the fact that some nonprofits are facing other challenges in the way of withheld funding, increased governmental regulations and downright program cancellation, and it’s easy to see how President Trump’s proposed tax reforms could have a significant effect on our nation’s charities and nonprofits.


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