By Shauw Chin Capps
With this year’s unusual Thanksgiving behind us, we are heading full speed into the Christmas season. This year, unlike any other, Christmas will also feel different as the pandemic puts limitations on our gatherings and activities.
However, as followers of Jesus made in the image of a generous God, I believe the desire we have within us to be generous and charitable will rise above the pandemic. November and December are when many of us consider end-of-year giving. In fact, about 30 percent of all giving occurs in December.
As you consider what you’re able to give to CBF at the close of 2020, keep in mind the opportunities the CARES Act affords you this year.
Charitable Giving Incentives
Most of us are familiar with the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was signed on March 27. The CARES Act provided a $2-trillion relief package to protect individuals and businesses from the economic impact of COVID-19.
In economic downturns, individuals tend to scale back their charitable giving, which can be detrimental to nonprofit organizations that rely on the generosity of their donors. Anticipating this, charitable giving incentives were among the CARES Act’s many provisions.
They include the following:
- For those who itemize their deductions, the Cares Act suspended the existing cap on charitable deductions, which was 60 percent of adjusted gross income, and thus made cash contributions to qualified charities in 2020 fully deductible.
- Charitable contributions in excess of your income can be carried forward for five years, subject to the 60 percent of Adjusted Gross Income limit in those years.
- If you take the standard deduction, the CARES Act allows for an additional charitable deduction of up to $300 per taxpayer ($600 for a married couple) for gifts made in cash.
- Corporations making charitable gifts in cash can now deduct up to 25 percent of taxable income, up from 10 percent.
- Required minimum distributions (RMD) is waived in 2020 for most donors: RMD for individuals over age 70 ½ are suspended until 2021. This includes distributions from defined benefit pension plans and 457 plans. The RMD is an attractive way for donors to make a significant charitable gift directly from their IRA to a charity through a qualified charitable contribution (QCD) while avoiding taxable income. The suspension of the RMD may dampen the incentive for a donor who makes a gift from their IRA to count toward that minimum. However, the tax benefit of the QCD remains. The takeaway – if you direct a QCD to CBF this year (up to $100,000 per individual), you will still reduce your taxable IRA balance. This allows all taxpayers, itemizers and non-itemizers alike, to direct gifts from their IRA to CBF in a tax efficient manner.
These provisions apply only to charitable giving in 2020, so it’s important to make your donation by December 31 to take advantage of them.
Your year-end gifts can help CBF to prepare for 2021. Now is the time to consult your tax advisor and call your gift planning attorney to discuss how you can maximize your philanthropic impact in 2020. It has been a challenging year, and the work of CBF to spread God’s hope here and around the world is more important than ever.
Make your year-end gift to CBF today! https://cbf.net/give
Should you need assistance or want more information, please contact me by email at firstname.lastname@example.org.
Shauw Chin Capps is president of the CBF Foundation and CBF’s chief development officer.