Identifying unfortunate news for the nonprofit industry

Identifying and understanding the external environment that impacts the Jaguar Athletic Fund’s performance is crucial to improving the organization and its mission. Charitable contributions rely on various external factors, such as shifts in donor motivation and values, financial priorities of donors and potential donors, competition with other nonprofit organizations, as well as how the recent tax reform bill will reform 501(c) organization. These factors must be assessed to measure their direct effects on JAF operations.The new tax law, the Tax Cuts and Jobs Act, could negatively affect JAF’s fundraising and donation operations due to reduced tax incentive to donate. Before the recent tax reform bill passed, donors could itemize their deductions and receive tax deductions for making charitable contributions to 501(c) organizations. Now the standard deduction has been nearly doubled which will decrease the number of taxpayers who opt to itemize their deductions. ┬áThis is unfortunate news for the nonprofit industry and taxpayers who benefited from charitable contribution deductions.

The opportunity to write-off charitable contributions generated positive attitudes towards charitable giving which translated into action. According to The Annual Report on Philanthropy for the Year 2016, Americans contributed about $390 billion to U.S. charities (Giving USA, 2017).In reality, not all donors are solely driven to support nonprofits from the goodness of their hearts.

In some cases, tax write-offs inspired some donors’ decisions to give. Based on estimates from the Tax Policy Center, analysts predict the new law to reduce charitable giving up to $20 billion in 2018. However, there is a 10 percent increase in the deduction amount an individual can make for giving to a nonprofit organization.

Though the Tax Cuts and Jobs Act does not remove deductions for charitable contributions, it does reduce the amount of tax benefits received from making charitable contributions. Ultimately, it makes the deduction less appealing because of the higher standard deduction. The new tax law and its effect on JAF and other 501(c) organizations must be greatly considered while strategizing future decisions regarding the campaign.

The Jaguar Athletic Fund competes with other nonprofit organizations locally and regionally for support and funding. The University of South Alabama athletics belongs to the Sun Belt Conference. Each athletic program within the conference has its own university-specific college fund association. Two major in-state competitors are the University of Alabama’s Crimson Tide Foundation and Auburn University Tigers Unlimited organizations. According to a NCAA fan map published in 2014, Mobile County consists of 51.3 percent Alabama fans, 21.

5 percent Auburn fans and only about 7 percent being Jaguar fans. However, external competition is not just limited to other universities’ college fund associations. Locally, JAF competes with various religious, educational, and public safety organizations: Boys and Girls Club of South Alabama, YMCA, Habitat for Humanity of Southwest Alabama, Ronald McDonald House Mobile. In psychographic terms, the public’s values, attitudes, interests, and lifestyles directly correspond to their involvement with a specific organization or organizations. Identifying an organization’s external competition is critical information needed to assess how well or poorly the organization functions within the industry.