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Payroll Tax Increase Expected to Suppress Charitable Giving

A just-released survey by Ipsos Public Affairs on behalf of ChildFund International finds that the return to the 6.2 percent payroll tax, an increase of 2 percent, will lead one in five Americans to reduce their charitable giving by an average of 29 percent. The survey also found

  • 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."

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Payroll Tax Increase Expected to Suppress Charitable Giving

A ChildFund International survey finds that 1 in 5 Americans will reduce charitable donations, and that most Americans grossly overestimate the size of U.S. foreign aid.

Image: Legislation designed to avert the “fiscal cliff” is likely to create another kind of precipitous drop: in charitable giving. A just-released survey by Ipsos Public Affairs on behalf of ChildFund finds that the increase in payroll taxes will lead one in five Americans to reduce their charitable giving by an average of 29 percent this year. Another 21 percent say they will not give at all to charity in the coming year.

Image: Among survey respondents, 54 percent say that, despite the tax increase, they will continue to make charitable donations at the same level. And 6 percent anticipate giving more.

Subheadline: Important Factors in American Charitable Giving

  • 50 percent believe it is key that the money is being used appropriately and honestly.
  • 20 percent say their priority is feeling a positive sense of well-being in knowing they are helping others.
  • 14 percent point to the fact that the cause reflects their personal values.
  • 7 percent say that receiving a tax deduction is the biggest motivation in giving.

Image: While Americans largely want developing countries to shoulder more responsibility, they drastically overestimate the amount of U.S. support to foreign countries, which is around 1 percent. More than half of Americans think that more than 10 percent of the budget is allocated to foreign aid. On average, Americans estimate that 22 percent of the federal budget is spent on foreign aid.

Subheadline: Foreign Aid

More than four in 10 survey respondents say the governments where children are being affected are most responsible for assisting their poor children.

Two in 10 say nonprofits or advocacy groups (23 percent) or individuals in nations where children are being affected (22%) should bear the most responsibility.

Fewer than one in 10 believe either individual Americans (7 percent) or the U.S. government (5 percent) are the most responsible for assisting their poor children.

Accountability

ChildFund International has earned high ratings from Charity Navigator, the American Institute of Philanthropy and Charities Review Council.

Learn more about our financial accountability »

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