Uncertainty around the estate tax and other tax rates is causing many wealthy Americans to have second thoughts about how much to donate to charities.
In a recent Bank of America study on high net worth philanthropy, which was conducted by The Center on Philanthropy at Indiana University, 67% of wealthy households said they would somewhat or dramatically decrease their charitable contributions if there were no income tax deductions for their donations, up from 47% in 2007. If the estate tax were repealed, like it has been in 2010, 43% of wealthy households would somewhat or dramatically increase the amount they leave to charity in an estate plan, up from 36% in 2007. That is the opposite of what a 2004 study by the Congressional Budget Office projected. The CBO study anticipated that permanent repeal of the estate tax would slash donations to charity by up to 12%.
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