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The Importance of the Estate Tax to Nonprofit Funding

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Oct 24, 2017

A recent article in Nonprofit Quarterly argues that nonprofits should weigh in on proposals to repeal the estate tax, as it may impact their bottom line. The estate tax, which is designed to reduce the concentration of wealth by taxing assets of wealthy, deceased individuals, has a positive impact on charitable giving—particularly bequests. According to NPQ, “Charites benefit from the estate tax because bequest gifts are not subject to it, creating an even stronger reason to leave a charitable bequest gift.”

The author also finds that when exemptions to the estate tax have been increased, fewer individuals have left charitable gifts. Indeed, “increases in the exemption level are statistically significantly associated with decreases in bequest giving, especially when the exemption level bumped over $3 million dollars or more.”

Ultimately, the article finds that “we should be concerned about the repeal of the estate tax if we are concerned about philanthropy.”

Read the full article here.

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