Extrapolating from statements by Treasury secretary nominee Steven Mnuchin and President-elect Donald Trump, the Art Newspaper‘s Helen Stoilas explores the potentially damaging impact on charitable giving in the years to come. If Trump pushes for a Reagan-esque tax plan, she says, and his proposal of an overall cap for deductions, then art institutions could be at risk.
Although Mnuchin, a former Goldman Sachs executive who is the son of power dealer Robert Mnuchin, has suggested that tax breaks for charitable donations will remain in place, a key piece of Trump’s campaign plan was a limit on itemized deductions. His proposal would prohibit singles from deducting more than $100,000 and limit couples to deductions of $200,000, which is expected to raise more than $1 trillion over a decade, according to Forbes. Donations would be combined into one lump sum, which may limit benefits for those making large donations either in cash or art.
Stoilas says the comparison with Reagan’s tax cuts is a source of alarm for many art institutions dependent on philanthropy. The American Alliance for Museums, for instance, reports that charitable gifts account “for more than one-third of [museum] operating funds.”
Nina Ozlu Tunceli, executive director of the Americans for the Arts Action Fund, tells TAN that the cap “would have the worst effect on charities,” noting recent major donations such as mogul David Geffen’s $100 million gift to the Museum of Modern Art as an example of “supergifts” that would be most affected under Trump’s plan.