Tuesday, July 18, 2023
Charitable giving is crucial to maintaining the health of arts throughout our country. Key findings from the 2023 Giving USA Report, released last month, showed that an estimated $499.33 billion was given to charities in 2022. This represents a decrease of 10.5%, when adjusted for inflation, from 2021 giving levels. Specifically, when adjusted for inflation, giving to the arts, culture and humanities decreased 8.9%. 64% of charitable giving, or $319.04 billion, came from individuals, underscoring the importance of individual contributions to sectors such as the arts.
Total charitable giving has only fallen three times in the last 40 years, in current dollars. With economic uncertainty and high inflation rates likely to continue into next year, charitable giving, particularly in the form of small donations from individuals, could continue to decrease significantly. Therefore, lawmakers are working to strengthen the donor base by incentivizing small donations. In May 2023, H.R. 3435, the Charitable Act, was introduced in the House by Representatives Blake Moore (R-UT) and Chris Pappas (D-NH) to reinstate–and expand–the deduction for charitable contributions for individuals not itemizing on their tax returns. Senators Paul Lankford (R-OK) and Chris Coons (D-DE) introduced S.566, the Senate companion, earlier this year. The bill would allow taxpayers who do not itemize on their tax return a below-the-line deduction for charitable giving on federal income taxes, valued at up to one-third of the standard deduction (around $4,500 for an individual filer and around $9,000 for married joint filers).
Contributions from individuals are oxygen for nonprofit arts and organizations, enabling them to make their cultural product accessible to the entire community. Even small fluctuations in this revenue stream can mean deficits for many organizations. The data make clear that the public believes in the value of the arts to their community. A public opinion poll conducted by Ipsos Public Affairs show 90% of Americans believes the arts improve quality of life, 86% believe they are important to local business and the economy, and 72% of Americans believe “the arts unify our communities regardless of age, race, and ethnicity”—a perspective observed across all demographic and economic categories. Economically, the arts have a similarly profound impact. According to U.S. Bureau of Economic Analysis, arts and cultural economic activity accounted for 4.4% of the GDP, or $1.02 trillion. Supporting individual charitable giving through the Charitable Act is vital to sustaining this growth and ensuring that the arts continue to benefit communities everywhere.