New Giving Rules

Hi everyone!

This a challenging time.  I have been sending out a number of things to help you.  I am going to try to share shorter items with you as they come up or as we develop them.  So, Calibration Point will be a little different for a bit.  

Right now I just want to focus on a couple of things.  The summary of the charitable giving impact from the stimulus package and then a podcast from The Fund Raising School.  We have also included an article with tips for working remotely.

From reviewing the stimulus package, there are three major areas that impact giving.  They are outlined below:  

1.  Individuals who desire to make smaller gifts will be able to now deduct them by up to $300 as a charitable deduction.  For the rest of 2020, an individual will be able to deduct up to $300, irrespective of whether or not they itemize their deductions.  This “above the line” deduction only applies to cash gifts.  

2.  Individuals who make larger gifts will now be able to deduct a larger level of their giving.  Currently, an individual may deduct up to 60% of their adjusted gross income (AGI) for charitable deductions of cash. The stimulus increases that.  Individuals can now make gifts of cash that represent a total 100% of their AGI for the year 2020. This is an election, so the donor who wants to use this provision must tell the IRS.  For some individuals, they could now eliminate their tax burden.  Contributions in excess of their total AGI may be carried forward for up to five additional years, which is yet another benefit and planning tool. This may not be used to fund Donor Advised Funds or Supporting Organizations.  We saw the impact in 2018 from increasing the ceiling from 50% to 60%, so now to go to 100% is significant. 

3.  Under the new package, corporations have more benefits and incentives.  Corporations can now give up to 25% of their taxable income instead of 10% This also applies to giving of food.   This will also be important to help incentivize corporate gifts.

I am sharing these with you so you are aware, but also to help you make your relationships aware.  These new incentives could have significant impact on giving in the remaining 2020 year.   

We are praying for all of you.   

Warmly,
Jamie