Baby Boomer Philanthropy & Charitable Giving in 2023
Charitable giving is often tied to the condition of the economy. When the economy is uncertain, donors may be more reluctant to fulfill their philanthropic intentions not knowing what assets they need to preserve for the future. This sentiment is confirmed in a recent article by the Association of Fundraising Professionals (AFP). AFP reported that in the third quarter of 2022, although charitable gifts rose 4.7%, the number of donors was down just over 7%. However, charitable giving in 2023 among baby boomers is holding firm.
Baby Boomers Charitable Giving in 2023
Baby Boomers are less likely to be swayed by the uncertain economy. As a whole, baby boomers tend to be philanthropic. Individuals in this generation are between the ages of 59 and 77 and are either retired or close to ending full-time work. In a recent Church Mutual Insurance survey, 65% of baby boomers do not anticipate making changes to their charitable giving in 2023. This may be because baby boomers have other sources outside of cash needed to fulfill their monthly financial obligations to donate to a charity such as through a donor-advised fund (DAF) or individual retirement account (IRA).
Your IRA & Charitable Giving
Owners of an IRA must start taking a required minimum distribution at a certain age or face a penalty. Prior to this year, the age for a required minimum distribution from an IRA was 72. At the end of 2022, Congress passed the Secure 2.0 Act that increased the required minimum distribution age to 73. Prior to 2023, individuals faced a steep penalty of 50% if failing to withdraw their required minimum distribution. This made IRA distributions an attractive gifting option to qualified charities as long as the total did not top $100,000. In 2023, the penalty for failing to take a required minimum distribution is reduced to 25%. In 2033, the required minimum distribution from IRA accounts will change to age 75. Although the penalty is less if the required minimum distribution is not achieved, many philanthropic baby boomers will continue to fulfill their giving through an IRA.
Questions on how you may be able to promote giving opportunities to baby boomers and other generations? Reach out to one of our AMPERAGE Marketing & Fundraising consultants at 319.268.9151 or email Jennifer at firstname.lastname@example.org.