US charities fear big drop in donations from middle classes

Washington

MANY US charities are worried that the tax overhaul bill signed by US President Donald Trump last Friday could spur a landmark shift in philanthropy, speeding along the decline of middle-class donors and transforming charitable gift-giving into a pursuit largely left to the wealthy.

The source of concern is how the tax bill is expected to sharply reduce the number of taxpayers who qualify for the charitable tax deduction - a big driver of gifts to nonprofits. One study predicts that donations will fall by at least US$13 billion, about 4.5 per cent, next year. That decline is expected to be concentrated among gifts from the middle of the income scale. The richest Americans will mostly keep their ability to take the tax break.