Limits to tax deductible gifts will cost charities, churches millions

The new PVV, VVD, NSC, and BBB coalition’s plan to about halve tax-deductible gifts and donations will have a big impact on charities and churches. Donations will drop by tens of millions of euros, Paul Smeets, a professor of philanthropy at the University of Amsterdam, told Nederlands Dagblad.

Smeets expects that the new limits won’t decrease the number of Netherlands residents who give money to charities and churches, but the amounts donated will fall. “People don’t just give to get a donation deduction. But they will donate less money.” He expects that this will particularly apply to wealthy people, who also make the biggest donation.

Based on previous research into giving behavior, Smeets predicts that donations to churches and charities will decline by at least 3.5 percent. That amounts to at least 56 million euros per year.

Smeets is critical of the measure, saying that politicians only looked at the cost of the tax deduction and not the benefits donations have for society. “People often don’t realize how important charities are. Churches care for the poor long before the government steps in. And many medicines have been developed with the support of charities. This really packs a wallop. Politicians must think carefully about whether they want that.”