Staying the Course With Your Philanthropic Impact

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By Karen Harris, CFP® and Molly Norton

Shaken by market volatility, donors may hold back or redirect funds to coronavirus relief efforts, putting pressure on non-profits trying to keep their basic programs up and running.

But a pandemic doesn’t have to throw your charitable plan off course. Below are three ideas for maintaining your philanthropic impact and helping the great organizations that need your continued support.

Two opportunities come to us through the Coronavirus Aid, Relief, and Economic Security (CARES) Act signed into law late last month.

Deductions

For charitable cash contributions up to $300, individuals who don’t itemize deductions will be able to take an above-the-line deduction.

An above-the-line deduction reduces your taxable income dollar for dollar. To qualify, the donation must go to a charitable organization described in IRC Section 170(b)(1)(A). Excess cash contributions carried over from a prior year do not qualify for the deduction.

Contributions

In addition, adjusted gross income (AGI) limitations on charitable contributions for 2020 have been increased to 100 percent (from 60 percent) of AGI for individuals who itemize and 25 percent (from 10 percent) of taxable income for corporations. If a contribution exceeds a donor’s AGI, the excess can be carried over to subsequent years, but will be subject to percentage limitations.

It is important to note that contributions into a supporting organization or donor-advised fund do not qualify for these incentives.

Donor-Advised Funds

If you’ve been waiting to figure out what to do with money sitting in your donor-advised fund (DAF), now is the time. Aside from the urgent needs of medical professionals and people in our communities at risk of losing housing or access to food, the broader non-profit sector needs ongoing support from its loyal donors.

Right now in the United States, there are $121 billion sitting in DAFs, and in the Brighton Jones community, we have more than $30 million committed to charity. What better moment to deploy these funds for the greater good?

If you need help with maximizing your philanthropic impact, please reach out to our team.

Karen Harris, CFP® serves as an advisor at Brighton Jones. Molly Norton is the firm’s philanthropic advisor.

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