Did Tax Reform Change Your Giving?

Did Tax Reform Change Your Giving?

 

Tax Reform in 2017 raised the standard deduction to $12,000 and $24,000 for singles and married filing joint. This decreased the number of households itemizing by over 20 million or a 50% reduction.

However, the charitable giving from individuals only decreased by 1.1% according to Giving USA 2019 Annual Report on Philanthropy for the year 2018.

While tax deduction may be one benefit donors seek in giving, it isn’t the driving force behind most charitable giving.

Studies have shown generosity strongly associated with a person’s sense of well-being. Being generous activates an area of the brain called the striatum. This area reacts to things we find rewarding. The ‘reward center’ of the brain releases dopamine and serotonin. These are natural pain-relieving chemicals. As a result, you receive a boost to your physical and mental health.

Some studies have shown similar benefits for those who volunteer their time. Making a social connection with others who believe in the same causes improves health. The benefits of volunteering have been found to be greater than taking up exercise or giving up smoking.

An example is Steve who is newly retired; he anticipated days of relaxing in the Bahamas each winter. After only a few years of being retired, Steve was dealing with depression. It was suggested he try volunteering. His initial reaction was, “I’m not showing up a for a job if I am not getting paid.” After further persuasion, Steve agreed to try volunteering.  He now has a sense of purpose; new social network and his depression is gone.

Random acts of kindness can result in similar health benefits. The definition of kindness is a behavioral response of compassion; actions that are selfless. It is a mindset that places compassion for others before one’s own interest.

What does kindness look like? Smiling at someone, paying the tab for the table next to you, sending a hand written note or post card, giving encouraging words to a co-worker. One Christmas Eve day, my brother-in-law, Tony, was doing last minute shopping. He decided to do a random act of kindness and bring coffee and bagels back for the extended family. He went to pay for the bagels, only to find they had been paid for. His next stop at the coffee shop had similar results. Only the person who paid had just left the coffee shop.

 

Tony hurried to catch up and ask about this ‘burst of kindness.’ The woman shared she had a prosperous year and wanted to share anonymously with others.     Tony’s take away: ‘We are blessed to be a blessing.’

 

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