Let’s face it. Few saw this coming—the defeat of Hillary Clinton by Donald Trump. Even some of the most balanced people I know suggested that the business and financial world was preparing for a Clinton presidency.
Call it what you will, but the benefit of Clinton presidency was that many expected “more of the same” particularly as it related to the charitable world. But we got Trump. The question is how Trump will affect the charitable world. The truth is that there’s still much unknown, but here’s a few thoughts:
- As the stock market goes, so goes the charitable world. Trump is considered pro-business, and accordingly the stock market has reacted favorably—generally. If stocks increase, there is a more likely surge of gifts of appreciated stock. Non-profits must and should have easy solutions for gifts of this type.
- Tax reform means uncertainty. Trump is promising tax reform with a simpler tax code. He’s promised lower rates coupled with lower deductions. The theory is that lower rates will produce more money for investment. Some charities might fear that fewer deductions will produce lower giving. And that fact is a real possibility. However, the nonprofit world must continue to make the large appeal of living generously as a way of personal lifestyle satisfaction. (Consider reading my blog titled The Science of Generosity.)
- Lower tax rates mean more money for investing. Trump’s plan to lower tax rates is driven by the idea of creating money for investment. Nonprofits need to think differently. They need to see themselves as a place worthy of investment. Like the private sector, new investment can create new jobs, new programs and new solutions in the nonprofit sector as well.
- Reduced federal spending places more emphasis on the viability of programs. While it’s unclear how Trump will view federal spending to support nonprofits, the inclination is that federal spending will go down. Those programs that rely on government spending will need to demonstrate greater viability and the strength of their results to the larger donor public.
- The Pence Factor. While much emphasis is placed on Trump, it is telling that Vice-President Pence took a lead role in the transition team. This suggests that Pence will continue play a key role in policy development. Pence is a pragmatist but equally understands the value and contribution of nonprofits and the communities they serve. He’ll seek to draw a balance between tax policy and nonprofit service to the community.