The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) includes some provisions that could affect charitable giving. These changes are worth communicating to your donors, but should be done so in a way that is sensitive to the hardship and crisis that has become a reality for people around the globe.
The CARES Act provides incentive for a large number of individuals to make cash gifts to charity, where before they received no tax benefit from charitable giving. Non-itemizers (people who take the standard deduction on their income tax returns) are allowed an above-the-line deduction of up to $300 for cash gifts to qualified charities.
It’s also important to note that what was once the 60%-of-adjusted-gross-income (“AGI”) deduction limitation has now been temporarily increased to up to 100% of AGI for cash gifts to public charities. This means that donors making large cash gifts can completely offset their income for 2020.