PATERSON, N.J. (CBSNewYork) — Many people are still trying to wrap their heads around the new tax overhaul plan.
But as CBS News’ Meg Oliver reported Thursday, some charities have big concerns and are worried they will end up losing small donors.
The Catholic Charities Food Pantry in Paterson, New Jersey lost everything in a fire just before the holidays. But they bounced back as people rushed to replenish their supplies.
“Within a week, we had donations from the community — more than we could hold, really. We had to get a storage container,” said Chris Barton of Catholic Charities.
She said the donations came from small donors, which are Catholic Charities’ bread and butter.
But now, Barton is concerned that restocking will not be as easy anymore because of the new tax law.
Millions of Americans are expected to take advantage of the new standard deduction that has been doubled – meaning fewer people will itemize their deductions.
Barton is worried that many Americans will not donate, because they will no longer benefit from the charitable tax break. She said there is no backup plan.
“Everything we do relies on those donors,” Barton said.
They are not alone. Charities such as the Red Cross, the Salvation Army, and United Way all depend on small contributions. The United Way expects to lose up to $450 million a year under the new plan.
But Mark Steber, chief tax officer for Jackson Hewitt, said he does not think there will be fewer people giving to charities.
“I would tell you just the opposite,” Steber said.
Steber recalls when the charitable deduction was scrapped in the 1980s.
“I would tell them to look at the 1985 tax law that took away — took away — the ability to deduct it on your tax return, and donations went up with that group,” he said.
As to whether she was worried about the future with the new tax plan, Barton sighed and said, “I think it remains to be seen.”
Barton is hoping people will continue to give – not for a tax break, but for the good of humanity.
One tax expert advises those who would like to get the deduction for their own donation to donate in advance for 2018 during the next three days. Those who give can then deduct it on their 2017 returns.
Anyone giving to charity is also reminded to let their nonprofit or religious institution know this will be their contribution for next year.