Make the Most of Your Charitable Donations
When the Tax Cuts and Jobs Act nearly doubled the standard deduction starting with the 2018 tax year, charities and tax experts expected donations to drop. Nearly one-third of taxpayers itemized deductions—including charitable giving—before the tax law overhaul, and the number of itemizers fell to 11% in 2018. Because charitable givers would no longer have the same tax-deduction incentive, the thinking went, charitable giving would suffer.
Indeed, giving by individual donors dipped 4.2% in 2018 from the previous year, according to Giving USA Foundation and the Lilly Family School of Philanthropy at Indiana University. But in 2019, donations bounced back 4.7%. And charitable giving kept rising dramatically as Americans responded to the pandemic and a variety of natural disasters. In a recent Fidelity Charitable study, 27% of donors said they gave more in 2020 than the year before.
The pandemic also changed how some people give. Individual donors, corporations and family foundations gifted more money to general need funds or to a charity’s general operating fund instead of writing a check for a specific project. Some projects—such as after-school programs—were on hiatus due to local shutdowns, and donors became more concerned about addressing pressing needs, particularly food and housing.
If you tend to bunch your donations at the end of the year, take some time to vet
