Are Tax Laws Making Us Stingier? Why Americans Give So Much Less to Charity Now

Americans gave a record $592.5 billion to charity in 2024, but fewer of us are actually reaching into our own pockets. Twenty years ago, giving was routine—two-thirds of households donated each year. Today, it’s less than half. A lot of this change comes down to shifts in U.S. tax law.

For decades, Washington has tweaked the tax code in ways that mostly benefited charitable giving by the wealthy. The Pension Protection Act of 2006 opened special perks for retirees with large IRAs who gave to charity. A 2012 tax law extended those benefits and boosted deductions for the very rich. But the real earthquake came in 2017, when the Tax Cuts and Jobs Act (TCJA) nearly doubled the standard deduction. Overnight, millions of middle-class families lost the tax incentive to donate, and those in the middle of the income distribution claiming a deduction for charitable giving dropped two-thirds, from about 17% to 5.5%.

Since then, America’s generosity has looked more “top-heavy”: fewer households giving, but bigger checks from the wealthy, foundations, and corporations keeping overall totals high.

The Giving Gap

Last year was a banner one for nonprofits. Individuals gave more than $392 billion, while corporate donations in particular surged by more than 9%, marking a record. Despite these headline numbers, the picture looks different when you zoom out beyond dollars and cents.

Since the TCJA, charitable dollars have rebounded in totals, but they’re coming from fewer people. This trend has given rise to “top-heavy philanthropy,” where wealthy individuals, foundations, and corporations make up a bigger share of giving.

Giving isn’t just about their generosity for wealthier households—it can offer massive savings on their taxes. The math is compelling: investors who donate appreciated stock can avoid capital gains taxes and still deduct the asset’s fair market value, while retirees over 70½ can give directly from their IRAs through qualified charitable distributions to cut their taxable income.

“For example, let’s say you are thinking about selling a long-term capital asset, incurring a long-term capital gains tax, and donating the net proceeds to charity,” Susan Hirshman, director of wealth management at Schwab Wealth Advisory, told Investopedia. “Instead, if you gift the appreciated asset directly to the charity, you can eliminate the capital gains tax and claim a charitable deduction for the fair market value of the assets.”

The results of the last two decades of tax changes are clear: after the TCJA, the average subsidy for charitable giving—the tax break donors receive for every dollar given—fell sharply for the middle class, from 8.1% to just 3.3%. For the top 1% of earners, the subsidy barely moved, slipping only from 30.5% to 28.9%—about nine times the subsidy for middle-class earners. In other words, wealthier households retained most of their tax advantages while everyday givers saw theirs all but vanish.

Yet, as Hirshman notes, high-net-worth individuals could be benefiting even more than they are currently. “Despite huge stock market gains, most wealthy donors still give cash instead of stock—a move that could cost them on taxes,” she said. According to Schwab data, 71% of high-net-worth investors donate by cash or check, just 8% give appreciated securities, and only 11% donate retirement assets—essentially leaving further tax savings on the table.

Where Are Americans’ Donations Going?

Religious organizations still get the biggest slice of Americans’ generosity, receiving $146.5 billion in 2024—nearly a quarter of all charitable donations. But with growth of just 1.9%, religious giving actually shrank after inflation.

By contrast, education charities surged 13.2% to $88.3 billion, while international affairs groups grew 17.7%. Public-society benefit organizations, including community foundations and civil rights groups, climbed an even stronger 19.5%

These shifts reflect the influence of wealthy donors, who now make up a bigger share of the giving pie. According to Charles Schwab, high-net-worth individuals favor giving to human services (31%) and religion (30%), followed closely by local organizations (27%) and health causes (27%). They also center politics more in their donations, with a third citing the political landscape and 14% mentioning geopolitical issues as key drivers in their giving.

The Bottom Line

The total amount of dollars Americans are giving to philanthropic causes is breaking records, but far fewer households are participating. Tax law changes—especially the 2017 overhaul—help explain a big part of the shift among those who aren’t high-net-worth individuals. As a result, philanthropy is more concentrated in the hands of the rich and institutions than it was earlier this century.