Thanksgiving celebrations and GivingTuesday are over, but the most generous time of year is just beginning! That’s right, the month of December is traditionally a time for giving to friends, family and favorite charitable organizations. Giving this time of year is embedded in many cultures and religions, and according to scientific studies, charitable giving makes people feel better by stimulating the natural release of endorphins in the human brain.
2020 has been a challenging year in so many ways with the emergence of a global pandemic, economic recession and stock market crash in the first quarter, but it appears that collectively there is much to be grateful for as the year draws to a close. In the second and third quarters, the economy, GDP, employment figures and charitable giving saw a substantial rebound. It appears that COVID-19 vaccines and treatments will begin to be available soon, and in a few weeks, we will start a new year. In the meantime, there is much to do to ensure the best possible year-end giving results.
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was passed earlier this year to provide assistance to individuals, business and nonprofits impacted by the economic challenges caused by the pandemic. The new law included a number of provisions designed to encourage charitable giving, including a new $300 above-the-line charitable deduction for cash contributions to qualified nonprofits for non-itemizers and the waiver of AGI limitations for cash gifts to most charitable organizations. For those who itemize deductions, additional provisions increased the amounts corporations could give from 10% to 25% of their taxable income.
Ideas for Giving Wisely in 2020
- Non-itemizers can receive a $300 above-the-line deduction for gifts of cash.
- Itemizers can give cash gifts up to 100% of AGI.
- Those age 70½ or older with an IRA can make qualified charitable distributions (QCDs) of up to $100,000 per year.
- Gifts of appreciated stock and other appropriate noncash assets like real estate can qualify for an itemized charitable deduction and also bypass capital gains tax.
- “Bunching” itemized deductions, including cash and noncash contributions, can allow nonitemizers to become itemizers in some years. For example, tax savings may be achieved by paying a pledge early or making a contribution to a donor advised fund in order to exceed the standard deduction in some years.
The End Is Near, but It Is Not Here Yet.
Sharpe Group is pleased to provide some downloadable resources to assist our clients and friends to make the most of the last few weeks of 2020. Please feel free to adapt these communications for your use.
Additionally, take a few minutes to review your gift development plans for December and make sure contact emails, phone numbers, giving totals and mailing addresses are all correct. Have email messages with information on IRA QCDs, stock transfers and other items prepared in advance. Consider calling and thanking donors for their prior support and to see how they are faring. Another group may be targeted for thank-you letters and cards, pledge reminders or a personal note as appropriate.
Finally, with 2021 right around the corner, you may want to review the links for a variety of publications, communications and training opportunities to help you work with donors and their advisors.
By Barlow T. Mann, General Counsel
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