Arizona Foster Care Tax Credit Not Impacted By Federal Tax Law Changes!
This year’s Federal tax law changes have brought confusion to taxpayers on many fronts. The increase in the standard deduction available to individuals has every charity concerned. Will the fact that many more tax filers will not be able to itemize their deductions adversely affect the dollars available to do good work in our community? Will those who have given before not give because of a potential loss of the tax benefit for a charitable contribution?
The Foster Alliance (TFA) is the State’s largest provider of basic needs for the almost 30,000 children who have spent at least one night in the foster care system in 2018. We receive no government funding for our services to these kids who have been victims of abuse and neglect. We rely on individual donors for the vast majority of our funding, AND we use 93 cents of every dollar donated for direct service expenses.
The potential negative impact of the tax law change has me very concerned about our ability to raise the funds we desperately need to continue our important work. As you will learn on our website, www.azhelpinghands.org, as of December 14th among our services, we have provided 3,133 children in foster care with a bed or a crib to sleep on. Perhaps the most important symbol of safety and security to a child who has been removed from troubled home life, is a spot to lay their head in comfort, snuggled up for a night’s sleep. We have provided 2,587 boys and girls with a Birthday Dreams package, a gift set wrapped and decorated with care by our volunteers. This act of love is sometimes the first birthday celebration these children have experienced in their lives.
The U.S. tax system has historically provided an incentive for taxpayers to donate to important causes. Will this year’s change mean that donors will think twice about using their dollars to make lives better for children and families in need? The answer remains to be seen.
Fortunately, there has been NO CHANGE in the ability for Arizona taxpayers to support The Foster Alliance through the Arizona foster care tax credit program. In 2013, Arizona legislators saw the need to take a dramatic step in service to children in our foster care system. They created a tax credit program, which allows individual taxpayers to donate dollars to a Qualifying Foster Care Charitable Organization and receive every dollar back on their Arizona state tax return. This dollar-for-dollar credit has been the engine that has fueled our dramatic growth in services throughout the State. We could not have touched the number of lives we have without this support from so many caring Arizonans.
In the latest quarter, individual donations to our organization are down by 45% from a year ago. I worry that this is due to the confusion and caution brought on by the new tax law. Will donors continue to give at the same level if their Federal tax deduction is impacted?
I know two things for certain – (1) the Arizona tax credit for donations to The Foster Alliance has not changed. Individuals can donate $1,000 as a married couple ($500 as single taxpayers) and get every penny back on their Arizona state tax return. You can make a difference in the lives of children in foster care at NO COST to you. (2) The Foster Alliance provides necessary, incredible, loving service to boys and girls who desperately need our assistance.
We bring joy and hope to boys and girls who have experienced horrific circumstances due to choices made by ignorant adults. They are the victims who we assist. I can only hope that time will prove that the main motivation for charitable giving is that people truly care about those in need in our community. Only with hindsight will we learn the true impact of the tax changes on our children. Are we motivated by the tax savings we will receive, or by the enormous good that our donations can make happen for boys and girls in foster care?
Dan Shufelt is the President & CEO of The Foster Alliance, the largest provider of basic needs to Arizona’s children in foster care. Learn more about the Organization at www.azhelpinghands.org and contact Dan at dshufelt@azhelpinghands.org.
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