Americans continue to adjust to the new way of life resulting from the coronavirus pandemic, many struggling with job loss, furloughs, layoffs, taking care of family members with coronavirus or falling ill themselves, and numerous other economic challenges facing the nation. It is during times like these when people turn to nonprofit organizations in exponential numbers, and these charitable institutions are scrambling to meet the increased demand for services despite a projected decrease in donations. Nonprofits need donations now more than ever, and the recently announced stimulus package was created to spark increased giving. For those who can afford to give, please give now and give as generously as you can to charities you trust – research and support those with reputations of delivering on their promise to you.
What has changed? The recently passed Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act (Pub. L. 116-136, Sections 2104 and 2105) modified charitable giving incentives in the United States in an effort to encourage increased philanthropy. The modifications allow for two distinct new features:
- partial above-the-line deduction (universal or non-itemizer deduction that applies to all taxpayers) for total charitable contributions of up to $300;
- and temporary suspension of limitations on certain cash contributions during 2020.
The incentive applies to qualified cash contributions made in 2020 and can be claimed on tax forms next year (Section 2204). The law also lifts the existing cap on annual contributions for those who itemize, raising it from 60 percent of adjusted gross income to 100 percent. For corporations, the law raises the annual limit from 10 percent to 25 percent. Food donations from corporations would be available to 25 percent, up from the current 15 percent cap (Section 2205). The new deduction is only for cash gifts that go to a public charity. So, if a donor gives cash to their existing or new donor advised fund or personal private foundation, the old deduction rules apply. If a donor's assets are substantial enough to give more than their income this year, they won’t lose the deduction for the excess amount – they can use it next year, as with previous rules.
As always, please consult with tax professionals for specific questions and concerns about the new incentives and how they might apply to your personal situation. There are many nuances to the incentives, and we anticipate changes might occur as time goes on.
Crisis events disproportionately and negatively affect our most vulnerable community members. Population Media Center (PMC) is here to fight for them, and all of us, through the pandemic and long after it comes to pass. We continue to integrate coronavirus prevention messaging in our communications around the world alongside core programming efforts to stop gender-based violence, provide reproductive rights, maintain access to family planning services, and overall consider population dynamics and their impact on the sustainability of our beautiful planet and all its beings. We hope PMC will be on your short list for giving in 2020.
To learn more about how to support PMC, please see https://www.populationmedia.org/donate-now/.
Sources: Council of Nonprofits, congress.gov