Charity organizations in Bakersfield and across the country get most of their operating revenue from donations both monetary and otherwise, but that could change next year.
Many nonprofits are concerned that with the increased standard deduction of $12,000 for individuals and $24,000 for married couples provided in the new tax bill signed by President Donald Trump on Dec. 22, people will be less incentivized to itemize such deductions.
Some people might also have less money to give next year, since the bill caps deductions of state and local income, as well as property taxes, at $10,000, a sum people can reach fast in high-tax states such as California.
Because that window of tax-deduction opportunity is closing soon, charities nationwide are seeing more donations than they usually get this time of year. Taxpayers are trying to get them in by the end of the year so they can reduce their taxable income.
Locally, charitable organizations say they haven’t seen any significant change from the normal donation increase they see every holiday season. But that doesn't mean they're not scrambling. And hoping to scramble more.
“Right after Christmas, we have a six-day stretch that is probably our heaviest six-day period out of the year. It’s usually about double what would be considered a normal six-day period,” said Jake Slayton, chief operating officer for Goodwill Industries’ Central California branch. “We’re very lucky that we have a very generous donation base.”
In the Bakersfield market, Slayton said, Goodwill usually gets an average of 175,000 donations each year, mostly clothes and household items. Through November of this year, Goodwill has had 147,000 donations. Taking December into account, Slayton said he expects this year's take will meet the average or slightly exceed it.
Slayton said he believes this year’s holiday season donations have stayed around the same because many people are unaware of the tax bill or are unsure of how it will impact themselves, let alone nonprofit organizations.
“I think there’s still a good amount of confusion out there about what is in the bill,” he said. “We’re not anticipating any immediate changes.”
Slayton said he hopes that regardless of what effect the bill will have, people will still continue to see the value of donating, whether or not they are able to deduct them from their taxable income.
“It’s important for the health of a society to maintain that charitable giving,” he said.
At United Way of Kern County, Vice President of Community Impact Jill Egland said there has been a modest rise in donations with the holiday season, but she doesn’t feel that it’s out of the ordinary.
“We have a nice bump this season,” she said. “I had thought there would be more disruption one way or the other with contributions because of the tax bill. I’m kind of surprised we haven’t seen that. We’re expecting that to change next year.”
Egland said she knows that due to the bill, donating will be a more difficult choice for people to make. However, she hopes that United Way can convince donors to continue giving.
“I think that more than ever, we need to talk less about asking for people’s contributions and rather ask people for their investment in making their community a place where we can all economically thrive,” she said.
According to the Lilly Family School of Philanthropy at Indiana University in Indianapolis, charitable organizations could lose as much as $13 billion worth of donations next year due to the bill.
Egland said that's a big concern.
"As an organization, we believe that this particular provision was short-sighted and puts many communities in an untenable situation where they have less money to provide services to people who are at-risk while there is more of a demand to provide those services,” she said.
While Egland said United Way of Kern County is ultimately disappointed with the final bill, the organization is looking to come up with ways to counteract the potential loss in revenue.
“We’re doing the same thing as everyone else. We’re thinking outside the box about this,” she said. “We have a solid mission that isn’t going to go away. We will find a way to keep moving forward.”
Eglund said the organization is looking at bulking up other income streams, such as additional grants. In talking with some donors, Eglund said, many of them are still interested in contributing.
“They understand the importance of what United Way does,” she said. “We play a convening role in the county. People appreciate the need and what we bring to the table.”
The local United Way receives primarily monetary donations, Eglund said. However, she said, they also seek clothes, books and other items for people in programs such as ReGIVE, through which the organization gives new or gently used items to homeless people.