To the Editor:

New research showing a sharp decline in giving in 2018 — the year after passage of the 2017 Tax Cuts and Jobs Act — must be tempered by a consideration of the extent of nonitemized giving, which is often difficult to capture. Rasheeda Childress’s article “Donors Likely Giving $16 Billion Less Each Year After Tax Law Change” (August 14) acknowledges this reality.

In a recent report for the American Enterprise Institute — “How the 2017 Tax Law Made Itemized Charitable Giving a Luxury Good” — Edmund J. McMahon and I shed some additional light on this issue. We found a multiyear decline in giving — not just a one-year decrease — based on an additional measure: Internal Revenue Service data for 2018 to 2021 showed that the average share of total adjusted gross income devoted to itemized charitable giving declined by 28 percent, even though adjusted gross income increased during that period.

Put another way, more income was available for charitable giving, yet less of it went to itemized donations. Total itemized deductions for charitable giving would have been $80 billion higher in 2021 if they had remained at the average share of adjusted gross income from 2010 to 2017.

While the dollar amount of giving has increased, those increases are less notable in major donor states such as New York and California, where taxpayers now face a sharp limit on the deductibility of their relatively high state and local taxes. We found that taxpayers in these states have so far not, as some had hoped, taken advantage of an expanded charitable tax deduction of up to 60 percent of income to compensate for those deduction limits.

Regardless of how charitable giving is measured, fundraisers will almost certainly need to prepare themselves for ongoing changes in taxpayer incentives. It’s unlikely that the increased standard deduction will be reduced next year. That increase resulted in a drop in itemized tax returns from an average of nearly 30 percent from 2010 to 2017 to 10 percent from 2018 to 2021, following enactment of the Tax Cuts and Jobs Act. Nor is it likely that the cap on state and local tax deductions will be greatly increased.

The result is that far fewer taxpayers will have reason to respond to end-of-calendar-year fundraising entreaties. That means organizations that rely on charitable contributions will have to find nontax reasons to appeal to small and midsize donors.