Stelter’s Senior Gift Planning Consultant, Lynn Gaumer, J.D., suggests ways to alert donors about some expiring CARES (Coronavirus Aid, Relief, and Economic Security) Act provisions.
Ready to turn the page on 2020? Hold on a second…
Finally, thankfully, we are approaching the end of this crazy, cataclysmic year. And we hope 2021 will allow us to breathe a big sigh of relief. But before you turn that last page on the calendar, use these next few weeks to remind your donors of the tax benefits that are expiring on Dec. 31.
First, let’s revisit some key provisions of the CARES Act that relate to the nonprofit sector:
Suspension of Required Minimum Distributions (and Impact on QCDs)
The law suspended the requirements for required minimum distributions (RMD) for the 2020 tax year. Some donors have decided to wait until 2021 for the return of the RMD to make qualified charitable distributions (QCD) while others have continued making gifts — especially now that the stock market has recovered. If you have donors who elected to hold off this year, perhaps they can make two QCD gifts in 2021: one at the beginning of the year (to make up for 2020) and one near the end of the year for their 2021 gift.
Expiring Tax Incentives for People to Give to Charity
- A limited $300 universal charitable deduction for cash gifts
The universal charitable deduction is an above-the-line deduction and is available to taxpayers who take the standard deduction. This tax incentive is available for cash gifts to qualified charities (and not to donor advised funds). Note that the $300 is per “tax filing unit,” so even married couples filing jointly deduct $300.
- A lift on the cap on deductions for cash contributions
Contributions to public charities are generally limited to a percentage of a taxpayer’s adjusted gross income (AGI). The law lifted the cap on cash contributions for those who itemize, increasing it from 60% to 100% of AGI for 2020. Any excess contributions available can be carried over to the next five years. For corporations, the law raised the annual limit from 10% to 25% of taxable income.
So How Can You Get the Word Out in These Final Weeks? Here Are 3 Ideas
Change Your Email Signature Line. Just above your name, add a little messaging about the expiring tax incentives, such as “Contact me to learn more about expiring charitable giving tax benefits this year” or “Thinking of making a gift of this year? Contact me to learn more about some expiring tax incentives.”
Connect With Your Donors Via a Telephone Call. Let them know they may be able to increase their giving this year (and take a deduction) by taking advantage of these expiring provisions.
Consider an End-of-Year Mini Campaign on Social Media. Encourage your donors to use their $300 tax-deductible contribution to benefit your organization. The impact can be even greater if a donor’s company matches the gift. Follow up with an impact story or highlight the total giving numbers (both in number of donors and dollar amount) on social media to show how even a small gift can make a big difference.
Stelter Is Here to Help
If you would like to send an email, we are here to help you get started. We have created a sample letter you can customize and send to your donors.
Access our sample copy by clicking on the button below.
Want to Learn More About How the Industry Is Responding at This Time?
Join Nathan Stelter as he addresses questions and concerns of fundraisers like you around the country and shares some ideas on how Stelter is tackling them, helping to put you, your organization and your donors in the best position for success. Check out his webinar “Planned Gift Marketing During & After COVID-19: A Chance to Pivot or Truly Change.”