Regina Pinney
Executive Director

From Reagan to Trump: How Federal Tax Policy Shapes Philanthropy and Community Power

In the early 1980s, President Ronald Reagan ushered in a new era of federal policy marked by deep tax cuts, sweeping deregulation, and a rhetorical commitment to shrinking the role of the federal government. His administration’s economic philosophy, often called “trickle-down economics,” rested on the belief that the private sector—including charitable organizations—could address social problems more effectively than centralized government programs.

Critics rightly pointed out that many of Reagan’s policies disproportionately harmed low-income and marginalized communities. Yet one enduring impact that often goes overlooked is how his administration’s tax reforms incentivized private philanthropy. By lowering income tax rates while retaining or even enhancing the charitable deduction, Reagan encouraged individuals and corporations to give more of their wealth away in service of the public good. The premise was clear: if government would no longer meet community needs at scale, then private giving would need to fill that gap—and tax policy was designed to support that shift.