Seven Ways to Support Charitable Giving amid the COVID-19 Crisis

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The COVID-19 crisis has created new demands and opportunities for giving.

The secretary general of the United Nations recently declared the COVID-19 emergency the most severe global crisis since World War II. Indeed, there are few sectors of society – locally or globally – that are not challenged by the medical and economic effects of the pandemic. Below, we illustrate examples of seven ways those seeking to support the causes they care about can make impactful contributions.

Take advantage of charitable giving incentives in the CARES Act
  • The recently passed $2 trillion CARES Act allows taxpayers to claim up to $300 in cash contributions made to a qualified public charity this year as a deduction from their gross income, even if they take the standard deduction on their 2020 return.
  • The act also lifts the existing cap on annual contributions for those who do itemize, raising the charitable deduction for cash donations from 60% of adjusted gross income to 100% for contributions made to qualified public charities. It is important to note that cash gifts to donor advised funds or supporting organizations do not qualify for this special treatment.
  • For 2020, the act also increases the 10% of taxable income limitation on charitable deductions for corporations to 25%. Contributions must be in cash to a qualifying charity. Additionally, the act increases the deduction for food inventory to a qualifying charity from 15% to 25%.
Use funds from your donor advised fund or private foundation

If you are hesitant to make outright donations of cash or other assets, now is an excellent time to direct resources from your donor advised fund or private foundation to support organizations and individuals in critical need. Doing so can help you maintain liquidity and maintain your investment strategy while supporting meaningful philanthropic initiatives.

Volunteer your time

Websites that promote volunteerism, such as Volunteer Match and Idealist, offer a variety of ideas to help others with the gift of your time. Opportunities include checking in on neighbors, packing and delivering meals, and donating blood. In this time of social distancing, these sites also list virtual volunteer efforts, including online mentoring, crisis hotlines and social media campaigns.

Align visions for family giving

Philanthropy provides the opportunity to explore shared family values and make a positive collective impact with charitable giving. This is especially true when all participants feel a sense of connection to the causes they support. Given the current COVID-19 crisis, uniting family members around a common goal can help bring meaning and purpose to our daily activities.

For families with younger children who may feel restless at home, this is a chance to reframe the discussion around the larger impact the crisis is having on vulnerable and at-risk populations.

Understand new options

Deciding where to lend support can feel overwhelming. Below, we offer several examples of the types of causes many donors are currently choosing to assist.

  • Response funds

    In collaboration with local governments, community foundations and United Ways, funders in many major cities have established response funds to pool collective dollars in support of local organizations. For example, the Chicago Community COVID-19 Response Fund is led by the City of Chicago, Chicago Community Trust and United Way of Metro Chicago. Check your local government, community foundation and United Way sites for local relief funds.

  • Human services

    Organizations in the human services arena (food, clothing, shelter) are facing particular strain as they experience increases in volume of clients served. Foodbanks especially are facing an increased demand for services. Feeding America, the largest hunger relief organization in the United States, can help you find local food banks to support.

  • Senior services

    Seniors are among the most vulnerable to COVID-19 and, consequently, so are the organizations that serve them. The need is great, and so are opportunities for giving: In light of the ban on visiting nursing homes, one donor recently funded the purchase of iPads at a local home so that residents could connect with their families. Other donors are choosing to support venerable organizations such as Meals on Wheels, which delivers meals to homebound seniors.

  • Requests for frontline assistance

    Frontline workers, who are risking their health to save others, are facing a shortage of personal protective equipment (PPE) such as masks, protective gowns and hand sanitizer. Milwaukee County, Wisconsin recently released a public request for assistance in securing these items. Check your local city, county and state websites to see if your community has a similar drive to support these brave and essential responders.

  • Hospitality industry relief

    With hospitality and food industries severely disrupted by mandatory closures and employee layoffs, local restaurant and industry trade groups are establishing giving campaigns, such as the Restaurant Association of Metropolitan Washington’s Coronavirus Worker Relief Fund. COVID-19 funds have also been established by national organizations, including the James Beard Foundation Relief Fund and Children of Restaurant Employees (CORE) COVID-19 Relief Program.

  • Arts and culture

    Major museums and performing arts organizations are feeling the impacts of closures, cancelled events and decreased fundraising. Their sites frequently offer direction on how you can assist. Additionally, local cultural organizations and groups have created relief funds to support artists financially impacted by the crisis, such as the Fulcrum Fund, established by 516 Arts in Albuquerque, New Mexico.

Join the “trust-based philanthropy” movement and consider being a “flexible funder”

With many organizations having less than 90 days of cash reserves on hand1, it is safe to say that the current state of social distancing and economic downturn will have a negative financial impact on nearly every organization. As a result, major funders are stepping up to the plate to ensure organizations can more quickly and easily access the funds they need in order to stay operational. By way of example, an initiative from the Council on Foundations seeks to ensure funds quickly and easily reach organizations.

Strategies include:

  • Giving dollars for general operating support instead of a specific project or program.
  • Allowing organizations to redirect existing grant dollars dedicated to a specific project or program to be used for general operating support.
  • Speeding up the process to receive future funding by reducing, and in many cases eliminating, the process of grant applications and grant reports. Consider having a direct conversation with a charity as an alternative to time-consuming paperwork and processes.
  • Providing bridge funding in the form of low-interest loans to organizations to help navigate short-term funding gaps.
Stay apprised of the rapidly evolving COVID-19 crisis and its impacts on the charitable sector

There are many resources available to keep aware of COVID-19’s impact on the charitable sector, the response of funders, and emerging opportunities to provide support. These include:

  1. Nonprofit Finance Fund’s State of the Nonprofit Sector Survey, 2018. https://nff.org/learn/survey

Disclosures

This information is not intended to be and should not be treated as legal, investment, accounting or tax advice and is for informational purposes only. Readers, including professionals, should under no circumstances rely upon this information as a substitute for their own research or for obtaining specific legal, accounting or tax advice from their own counsel. All information discussed herein is current only as of the date appearing in this material and is subject to change at any time without notice.