1988 Ronald Reagan - Reclaiming the American Dream (private initiatives and increased charitable giving)

In 1988, President Reagan opened his State of the Union Address with a victory lap citing lower taxes, record employment numbers, higher paying jobs and declining poverty rates, and then he added one more unexpected victory.   Charitable giving in 1988 topped $100 billion for the first time ever.  It was something that his opponents said would never happen under his tax plan.  Yet, here Reagan was boating of ushering in not only "the longest peacetime expansion in history but an economic and social revolution of hope based on work, incentives, growth, and opportunity".   Rather than government coercing individuals through taxation to contribute their hard-earned money to charitable giving, Reagan unleashed a "revolution of compassion" that replaced government hand-outs with private initiatives and led to a "77-percent increase in charitable giving".   President Reagan, our 40th President called it "a revolution that at a critical moment in world history reclaimed and restored the American dream".

"Our record is not just the longest peacetime expansion in history but an economic and social revolution of hope based on work, incentives, growth, and opportunity; a revolution of compassion that led to private sector initiatives and a 77-percent increase in charitable giving; a revolution that at a critical moment in world history reclaimed and restored the American dream."

They said it could not be done.  When President Reagan revealed his new tax plan that included an elimination of the charitable gift deduction for individuals who do not itemize, he unleashed a whirlwind of opposition from nonprofit organizations and media outlets.  The New York Times reported on May 30, 1985 that if Reagan's entire tax package was adopted, it would result in a loss of almost $10 billion in individual contributions.  A coalition, known as the Independent Sector chimed in that eliminating the charitable deduction alone would result in a loss of almost $6 billion.   Jack Maskowitz, a vice president of the United Way of America was quoted as saying, "Tens of thousands of national organizations which need charitable support are terribly disappointed the President called for its repeal".   When the John Hopkins University released a study emphasizing that this would hit many nonprofit groups who were also losing government grants because of Reagan’s budget proposal, a vocal protest movement got under way.  Nonprofit leaders accused the Reagan administration of erecting new obstacles to philanthropy and removing financial incentives to charitable giving.

Yet, despite all the fears and protests, the Giving USA Foundation, which had been studying philanthropic since 1935 reported that overall charitable giving was up 6.75% almost double that of inflation with the largest increase coming from individuals whose contributions rose from $80.7 billion in 1987 to $86.7 billion 1988, a 7.3% increase.   The only sad spot was in corporate giving which was for the most part due to aa rash of mergers, acquisitions and buyouts.  I'm sure the liberal presses at the time did their fact-checking on Reagan's 77% number and critics argued, that charitable giving would have been even much higher if the new tax laws had not been implemented, but there is no doubt that their worst fears and predictions never came true.

References

Presidency.ucsb.edu. (2019). Address Before a Joint Session of Congress on the State of the Union | The American Presidency Project. [online] Available at: https://www.presidency.ucsb.edu/documents/address-before-joint-session-congress-the-state-the-union-0 [Accessed 7 Feb. 2019].

Teltsch, K. (2019). Americans Donated $104 Billion in '88. [online] Nytimes.com. Available at: https://www.nytimes.com/1989/06/07/us/americans-donated-104-billion-in-88.html [Accessed 7 Feb. 2019].

Teltsch, K. (2019). REAGAN'S TAX PLAN; LOSS OF CHARITY DEDUCTIONS WOULD HURT, GROUPS ASSERT. [online] Nytimes.com. Available at: https://www.nytimes.com/1985/05/30/business/reagan-s-tax-plan-loss-of-charity-deductions-would-hurt-groups-assert.html [Accessed 7 Feb. 2019].

The Chronicle of Philanthropy. (2019). Ronald Reagan Helped Philanthropy, Despite How Much Nonprofit World Objected to His Policies. [online] Available at: https://www.philanthropy.com/article/Ronald-Reagan-Helped/168649 [Accessed 7 Feb. 2019].