Kenyon College’s announcement of an anonymous gift of $75 million for a new library and academic quad is cause for joy and appreciation for its donor’s generosity. It’s also a reminder that we’re likely to see many fewer such transformative gifts if Congress repeals the federal estate tax as the President strongly desires.
People make large charitable contributions for a variety of reasons; the estate tax is one powerful incentive. Removing that incentive will cause a substantial decline in very large gifts. That’s what happened in 2010, when the estate tax was temporarily not in force: https://www.irs.gov/statistics/soi-tax-stats-estate-tax-statistics-filing-year-table-3 bequests from estates declined that year by 37 percent from the previous year ($11.9 to $7.49 billion). In 2011, when the estate tax was restored, those gifts rose 92 percent (to $14.36 billion). Much is at stake for Ohio’s universities and colleges, that received some $1.3 billion in contributions of $1 million or greater from 2005 to 2017 (Chronicle of Philanthropy). For all of the vital institutions that are increasingly reliant on major gifts as governmental budgets are squeezed, this would be the worst time to remove such an important incentive for high level giving.