Document Type

Research Report

Publication Date

5-2025

Abstract

Executive Summary:

The first Trump Administration’s 2017 Tax Cuts and Jobs Act (TCJA) fundamentally altered America's charitable giving landscape through a two-step approach: first by reducing tax incentives for middle-class donors, then by empowering ultra-wealthy philanthropists. These changes have shifted control of charitable giving from everyday Americans to a small “Philanthropist Class,” referring to ultra-high-net-worth individuals who contribute vast sums, often through foundations or donor-advised funds (DAFs). This shift in charitable power holds profound implications for democracy, equality, and nonprofit sustainability.

The TCJA nearly doubled the standard deduction while limiting itemized deductions, causing the percentage of middle-class households claiming charitable deductions to plummet from 17% to just 5.5%. Simultaneously, the legislation provided tailored benefits to wealthy donors through estate tax exemption increases and corporate tax cuts. The result? A $20 billion decrease in charitable giving in 2018, predominantly from middle-class donors, while the top 1% of earners now control 56% of charitable donation value (up from 40% pre-TCJA).

During his second term, President Trump and his administration have signaled skepticism toward large private foundations, raising questions about renewing or rescinding their tax-exempt status. These attacks combined with concentration of giving power represent a deliberate policy shift, creating a framework that could entrench plutocratic influence over the U.S.’s philanthropic priorities. Without intervention, America's philanthropic landscape will increasingly reflect the priorities of the ultra-wealthy rather than the diverse needs and values of its communities.

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