Friday, October 12, 2012

Let's Play "Let's Predict the Future"

Last year several studies looked at the the possible effects of changes in the tax law on American giving patterns. As I noted in November 2011 the studies found a range of giving decline of between $.8 billion and $5.6 billion (the high number estimate is only about 2% of annual giving.)

Given the variation of these expert economic models, let's all play experts for a second. 

Here's the question, "What would affect donors' behavior more, changes in the tax deductions associated with their their giving or rules requiring greater transparency about their giving?"

Let me know what you think in comments or on twitter (@p2173). Unlike 6th grade math you can just share your opinion, you don't need to show your work, although I also welcome you to explain your opinion.

(The savvier of you will, of course, realize that I'm asking because I think changes of either kind might lie in the year ahead....)

1 comment:

EmAllise said...

My first thought is that the shifts would impact the giving practices of very different demographic groups. For large, corporate donors, donations are means by which to purchase goodwill and tax breaks. For the individual donor, they purchase a sense of well-being. Improving transparency (if done well), would increase the market value of donations in well-being and goodwill; decreasing tax deductions would decrease the market value in write-offs.

So, my answer is: a larger number of donors would shift their purchasing practices more significantly with a change in transparency - whether that translates into a greater shift in absolute monetary terms, I am not sure.