December 29, 2017; CBS News, “Moneyworks”
A fascinating report from CBS News’ “Moneyworks” covers a study from Accounting Principals which found that only 63 percent of companies said they planned to give year-end bonuses, down from 75 percent the year before. But the more interesting finding is that 38 percent of those not giving bonuses said they would be giving to charity instead. That’s some increase from 2015 and 2016, when the percentages were five and seven percent, respectively.
“It’s a pretty drastic increase,” said Jeramy Kaiman, vice president at Accounting Principals. “The financial incentive to give out more bonuses by the end of this year is for the corporation to have more business deductions in 2017 while the tax rate is high,” said Mildred Carter, a senior federal tax analyst at Wolters Kluwer Tax & Accounting.
And, as another market analyst reflecting on the numbers of natural disasters suggests, it also gives a quick boost in a more values-conscious market—a twofer of sorts.
This year, though, charities may not split hairs when receiving higher donations from corporations; they’re just happy to see more year-end donations, since the impacts of the new tax bill on 2018 giving are unclear at best and feared to be disastrous for promoting giving at worst, with “an estimated loss of giving between $12 and $20 billion in 2018.” What is clear is that NPQ will continue to monitor the effects of this bill both on charities and individual giving behavior.—Jeannie Fox and Ruth McCambridge