Making the Most of a Year-End Like No Other
November 23, 2020
2020 – the year of perfect vision has been anything put a perfect year or the year we anticipated. As we approach the traditional season of thanks and giving, it is an ideal time to pause, reflect, and act on our giving priorities.
Charities are an integral part of our private-public partnership of individuals and government meeting the needs of our communities. Yet, the number of households that give donations to charitable, civic or nonprofit organizations has been on a steady decline for two decades – there were 20 million fewer giving households in 2016 than in 2000. Mega transformational gifts have kept overall giving levels steady, but we may be at risk of losing much of an entire generation of giving households. The time to reverse that trend is now and we can be change-makers in our families, businesses, and communities this holiday season.
- Did you know that under the CARES Act, even individuals who do not itemized their income tax deductions can claim up to a $300 deduction for gifts of cash to a public charity in 2020? Encourage young adult and early career children and grandchildren to think about the causes they care about and make a gift before year-end. Small acts of giving repeated over time create habits of giving and have a real impact. Just think, if the 20 million households that are no longer giving were replaced by individuals making a $300 gift this year, giving would increase by $6 billion!
- Thinking of a larger gift in 2020 but are concerned with deduction limits? The CARES Act also made it easier for individuals to make large cash gifts to public charities in 2020. The 60% of adjusted gross income limitation on the individual charitable income tax deduction has been increased to 100% in 2020, thereby effectively removing the limitation on deductions for qualifying charitable contributions.
- Concerned with maxing out your corporate charitable income tax deduction? The CARES Act also increased the percentage limitation for charitable deductions for corporations in 2020, increasing the percentage of taxable income limitation from 10% to 25%.
The act of giving is a gift in and of itself. Individuals who make a habit of regular giving during life have been found to be happier and healthier and to have a stronger sense of purpose than those who do not. Giving is a win-win for the giver and the recipient.
For more information on charitable gift planning, contact the Levenfeld Pearlstein Trusts and Estates Group.
20 million decline in giving households
Indiana University Lily School of Philanthropy Panel Study. 2019. Generosity for Life. Retrieved from https://philanthropy.iupui.eaodu/research<em>; osili,=”” una,=”” clark,=”” chelsea=”” &=”” hang,=”” xiao,=”” 2019.=”” 16=”” years=”” of=”” charitable=”” giving.=”” retrieved=”” from=”” <=”” em=””>https://scholarworks.iupus.edu/bittream/handle/1805/21470/gfl-research191212.pdf?sequence=1&isAllowed=y</em>;>
Benefits of giving
Davidson, Hilary & Smith, Christian. 2016. The Paradox of Generosity. Oxford University Press.