Nonprofit organizations depend on charitable donations to fulfill their mission and achieve maximum impact. That’s great news, since charitable giving in the United States is at an all-time high, surpassing $400 billion in 2017. In the past decade, giving increased by nearly $100 billion. What’s more, contributions increased across all types of givers, especially from individuals, foundations, and corporations. And eight out of nine nonprofit subsectors benefited from increased giving, with religion, education, and human services receiving the most charitable dollars.  

How tax laws are affecting your nonprofit

tax reform and charitable givingThere’s more good news for nonprofits. Tax reform has significantly reduced tax liability for corporations—from 35% to 21%—which will allow them to become even more profitable. Nonprofits will benefit from this in a number of ways, including more earnings to earmark for charitable giving programs. (Charitable dollars receive a 50% write-off on corporate taxes.) Both individual and corporate tax cuts, along with a strong economy, should increase the levels of individual, corporate, and foundation giving.

e-book tax reform & charitable giving: how finance leaders can help sustain nonprofit revenue

What we’re discovering about external impacts

The National Development Institute recently surveyed major donors to determine why they give and how to better engage them. Interestingly, getting a tax write-off was not listed as a motivator. Donors give because they respect the mission, campaigns, and/or leaders of a nonprofit organization. They believe in the good that that charity is doing in the world. It’s clear that nonprofit organizations must focus on giving greater visibility to their story and results, so donors can share in the success of their mission.      

As we mentioned, a strong economy supports giving, and the U.S. economy is doing very well. As long as the economy remains robust, giving from both individuals and corporations should continue to grow. In addition, high stock market levels support increased giving from foundations. The current economic environment offers an excellent opportunity to sustain—and even strengthen—revenue.

Next steps: How can nonprofits sustain and strengthen revenue growth?

To illustrate your organization’s story and engage donors, you’ll need to know exactly what your nonprofit spends, how it performs, and where it makes the greatest impact. A modern fund accounting solution from Sage Intacct automatically tags and tracks your data by key dimensions—giving you instant visibility and insights so you can proactively manage performance, locations, programs, members, and funds. The automation of processes helps you strengthen stewardship, and added efficiency frees up resources for strategic initiatives.

Moving to Sage Intacct will strengthen your story and make your organization’s impact more visible. With modern fund accounting from Sage Intacct, you can:

  • Reduce the month-end close cycle by 50%
  • Reduce hours/days spent manually reporting
  • Improve cash flow with automated grant management and billing
  • Gain instant visibility into the key performance metrics of your organization
  • Show donors the impact of their gifts

Seize the day with Dean Dorton and Sage Intacct

With a strong economy and charitable giving at an all-time high, now is the time to sustain revenue and grow funding. To tell your organization’s story to donors effectively, you must show how the dollars they give turn into results—whether that’s meals served, artists supported, or animals protected. A modern nonprofit financial management solution from Sage Intacct will help you measure and report on key metrics in real-time, thereby increasing visibility into stewardship and outcomes.