How Might COVID-19 Change the Way We Give in 2020 and Beyond?
A year of dramatic change across the board, 2020 has shifted the lives of millions of Americans. We have been left to evaluate our priorities and change our daily way of life, which has left us to wonder: how will COVID-19’s affect on the world change charitable giving? Throughout this holiday season and beyond, we believe that you will continue to see philanthropic efforts. However, like many other aspects of our lives, this year will look a tad different. Here are the five primary ways that we expect COVID-19 to change the way we give.
1. An Increase in Donor Advised Funds
Donor-advised funds remain, even amid a pandemic, a tax-efficient way to give to charity. With this type of fund, you can donate assets such as stocks and mutual fund shares while investing those funds to allow them to grow tax-free—which can increase your funds to ultimately enable you to donate more overall.
As a bonus, donor-advised funds can make charitable giving easier than making individual contributions on your own. The fund eliminates the need to keep track of every charity that you donate to from. Instead, when you are ready to donate, you will simply log into your account and choose the public charity you would like to support.
2. Donating to Charity in Lieu of Gifts
According to a survey by Travelocity, 60% of Americans report they won’t be traveling to visit loved ones for the holidays in 2020. It stands to reason that travel numbers and family gatherings will also be down well beyond this year as we continue to fight the effects of the pandemic.
Of course, this dramatic decrease in in-person gatherings calls for an increase in gifts that can easily be shipped—online orders, virtual gift cards, and cash transfers. However, it also leaves families considering different and more meaningful ways to show appreciation for those they love. When families can’t be together, they may opt-out of gifting, choosing instead to make a charitable donation in their loved ones’ names. This option can take the stress off of families in an already-challenging year while making a significant impact on a charity’s well-being—as a COVID-19-related decrease in in-person volunteering and fundraising will heavily impact nonprofits for the foreseeable future.
3. Less In-Person Volunteer Time
Charitable organizations do not rely solely on monetary donations, but also their in-person volunteers. Consider any of your favorite charities. With a limited number of volunteers, these organizations will not be able to function at full capacity as they once did. This shift poses a few unforeseen challenges to nonprofit organizations across the country.
Early in the pandemic, Feeding America had reportedly seen a more than 60% increase in the number of donations they received to their food bank locations. This sounds like great news, right? It is. However, the organization also saw a 60% decrease in in-person volunteers, limiting the impact they could make with the influx of donations.
As we see fewer people volunteering in person, it is important to remember this isn’t the only way to volunteer our time. Contact a reputable charity that you would like to help and see what you can do to assist them as a virtual volunteer. This might include sharing their social media efforts or calling for donations. You may even donate your time as a professional of your industry. Organizations’ needs likely span beyond what you can do when you are physically at their location.
4. Fewer Fundraising Events and More Virtual Options
Virtual events quickly became our norm. From working remotely and attending Zoom meetings to our children attending distance learning courses, we are very familiar with the need for video conferencing to continue parts of our lives that were once face-to-face. The same has proven to be true for nonprofit fundraising in 2020. You may notice that events you once attended are taking shape a bit differently, manifesting as videos, Zoom calls, email marketing, social media campaigns, and more. This year, although we have seen fewer fundraising events, we know that it does not mean that organizations aren’t on the ground working to fund their cause. You should expect to see some fun and creative fundraising efforts from your favorite charities over the next few months.
5. Utilization of CARES Act Stimulus to Increase Donations
The Coronavirus Aid, Relief, and Economic Security Act, more commonly known as the CARES Act, has changed how Americans benefit from charitable giving in 2020. Of two changes that may increase giving this year, the first is a new deduction that will allow taxpayers who do not itemize their deductions to deduct a donation of up to $300 to a registered nonprofit ($600 for married couples). The second change is to charitable deduction limits, which will allow those who do itemize to deduct charitable contributions that are up to 100% of their adjusted gross income.
6. Increased Awareness of How to Best Help Those Affected by COVID-19
Over the past several months, many have become more familiar with the types of charities that need our help the most due to COVID-19. We expect that this trend will continue as organizations continue to send the message of how the pandemic has impacted their cause and how you can help. To learn more about making the biggest impact, visit our blog 4 Ways to Help Those Affected by the COVID-19 Pandemic.
Do you hope to make a difference in the world while also maximizing your tax outcomes? Contact us today to get started!
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