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U.S. payroll tax hike seen hurting charitable giving: survey

NEW YORK (Reuters) - Charities that rely on donations from individuals should brace for lean times, with the U.S. payroll tax increase expected to curtail Americans' generosity, according to a poll released on Thursday.

One in five people questioned for the survey said they would reduce their charitable giving by an average of 29 percent because of the 2 percentage point tax increase, to 6.2 percent. The tax hike was part of the 11th-hour "fiscal cliff" deal negotiated in Washington and sealed on January 1.

More than a fifth, or 21 percent said they would not give to charities at all in the coming year, the survey conducted by Ipsos Public Affairs for ChildFund International showed.

"The survey results suggest a challenging year ahead in what already has been a demanding fundraising climate," said Tereza Byrne, chief development officer of ChildFund International, a U.S.-based global child development non-profit agency. The group was formerly known as the Christian Children's Fund.

"If that comes to pass, it will likely have broad-reaching consequences across the non-profit landscape," she added.

Byrne called the anticipated cut in donations from one in five Americans "alarming," even though more than half, or 54 percent, said they did not plan to curtail their donations, while 6 percent expected to give more.

While most of the scheduled tax hikes and spending cuts under the "fiscal cliff" were avoided when Congress struck a deal, most U.S. workers saw their take-home salary diminished by the expiry of the 2 percentage-point cut in payroll taxes.

The survey showed that for half those surveyed, the most important factor for charitable giving was whether the money was being used appropriately and honestly. Only 14 percent said the most important thing was whether the charity reflected their personal values, while 7 percent cited a tax deduction as the primary motivation for giving.

The survey polled 1,012 adults online between January 10 and January 14 and was considered accurate to within plus or minus 3.5 percentage points.

(Reporting by Chris Michaud; Editing by Patricia Reaney and Dan Grebler)

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