Modeling Geneva charitable deductions: regular giving and future trends

Abstract This study conducts the first large-scale analysis of tax incentives for charitable giving in Switzerland, focusing on regular donors and using innovative statistical forecasts. For the first time, these estimates are validated with cumulative data from Geneva authorities. Using unique panel data from Geneva taxpayers (2001–2011), this study examines income tax deductions, donation frequency, and donor characteristics, alongside forecasts for future charitable deductions and donor trends. This period also included a legal reform that raised the deduction ceilings. Findings reveal that 29% of donors deducted only once, while 71% deducted multiple times. Regular donors are not significantly influenced by tax incentive ceilings, but their donations increase over time. Wealth plays a crucial role in donation frequency, as shown by linear regression estimates. Time-series forecasting models predict total deductions steadily reaching CHF135 million by 2022, with results validated against actual data. The donor population was also forecasted to grow, reaching 72,349 by 2022, four times the 2001 figure. Based on these empirical findings, the study suggests policy measures to enhance charitable giving, aligning with legislative tax reforms. These projections offer valuable insights into optimizing tax incentives.