Donor Incentives to Give in 2020
In December, many nonprofit organizations benefit from donors’ year-end contributions. Even during a pandemic year, opportunities have been created in 2020 to encourage donors to support their favorite charities.
In 2018, the Tax Cuts and Jobs Act became effective. The act increased the standardized deduction amount and capped deductions for mortgage interest and state and local taxes. The result was fewer individuals able to itemize their taxes, leading to fewer receiving a tax benefit for charitable contributions. FreeWill notes 30% of taxpayers itemized their taxes in 2017 compared with an expected 10% of itemized taxpayers in 2021.
The CARES or Coronavirus Relief Act passed in spring 2020 provided an incentive for all taxpayers to donate to charity, regardless of whether the individual itemizes or exercises the standard deduction on their taxes. The CARES Act allows all taxpayers to take a tax deduction for charitable gifts up to $300 made in 2020.
The rise in the stock market, coupled with reduced money spent on entertainment and travel this year, has created more wealth for some individuals. This may prove to be another giving opportunity for donors, particularly those who may find an advantage in making a non-cash gift, such as through stocks or mutual funds.
For individuals age 70 ½ and older, making a charitable contribution up to $100,000 through an IRA is tax-free. It also reduces the individual’s IRA balance and taxable income for future years. For these donors, non-cash gifts offer greater tax incentives than cash gifts.
Many donors want to support your organization’s needs but do not always know the best way to do so. Helping donors understand the benefits of making a gift this calendar year will help strengthen their trust and support to your organization in future years.
Justin Tolan, CFRE
When Justin and AMPERAGE first met, Justin was one of the agency’s clients. Now, as a fundraising consultant on the other side of the table, Justin helps AMPERAGE’s nonprofit clients get results. Renowned for not being too pushy because he’s worked in the fundraising trenches himself, Justin relates to, listens to and understands clients’ unique needs. A Certified Fund Raising Executive (CFRE), Justin has long-established relationships with foundations and corporate funders and knows the ins and outs of running a successful fundraising campaign. A journalism graduate of the University of Iowa, Justin began his career in Germany as an intern with Stars and Stripes newspaper for the armed forces. Upon his return stateside, he worked as sports editor for the Ottumwa Courier. He charted a new career course with a communications position at Lutheran Mutual/Century Life of America (now CUNA Mutual) insurance company and then a public relations and fundraising position with Lutheran Services in Iowa/Bremwood — before ultimately joining AMPERAGE. Justin has been a writer throughout his career and is a contributing author to two books: “Successful Capital Campaigns: From Start to Finish” and “Nonprofit Consulting Playbook: Winning Strategies from 25 Leaders in the Field.” He is a member and past president of the Association of Fundraising Professionals-Eastern Iowa Chapter, which honored Justin as 2015 Outstanding Fundraising Professional. He is also a member of the Eastern Iowa Planned Giving Council. Justin is also active in the community through organizations such as Big Brothers Big Sisters, Junior Achievement and Waverly-Shell Rock United Way. As an avid Chicago Cubs fan, Justin’s favorite holiday is opening day of the Major League Baseball season. That may explain his collection of old baseball cards and why he can name the entire 1965 team roster of the Minnesota Twins.
