Using the CARES Act to Your Best Advantage for Year-End Giving

NOTE: The Coronavirus stimulus package that was approved on 12/28/20 extends the provision allowing individuals to claim a charitable deduction of up to 100% of their AGI into 2021 instead of ending in 2020. 

As we approach the close of this unique year, one important opportunity for your station to receive more major giving support should not be neglected. A goal of the 2020 CARES Act was to spur Americans to donate to “public charities” in light of the pandemic. For those donors with greater wealth there is a particularly beneficial provision that changes the charitable deduction maximum from 60% adjusted gross income (AGI) to 100%.

What this means is that now the donors with the potential to give very large gifts have an extra incentive to do so. This isn’t a relevant opportunity for your membership donor but using it with your major donors and prospects could help you motivate your higher capacity donors to give before year-end and strengthen your financial bottom line for 2020.

Three ways to take advantage of this change:

1. Ask your donors with multi-year pledges to accelerate their payments.For example, if you have donors who have pledged $500,000 towards your station with gifts of $100,000 a year for five years, consider asking them to make two payments this year to take advantage of the enhanced deduction.
2. Ask donors who have made a bequest commitment to consider making a cash gift now.
   This obviously needs to be done with care and only for the donors you believe will have the cash to make this possible (non-cash gifts are not eligible for the enhanced deduction).
3. Add information about the enhanced deduction to your pitch and/or leave-behind materials.
   While some of your wealthy donors do have tax or philanthropic advisors giving them council, certainly not all do. Your donors may not realize the tax benefits that are available to them through the stimulus legislation that was approved on 12/28/20.

It may help to think of your role as one of acting in service to the donor, providing them a way to potentially benefit their tax situation and accelerate the good you can do with their gift. As with all the solicitations that we make in public media, the tax deduction should not be presented as the reason to give. The reasons are, of course, your programming and impact on your communities. But this might be exactly the reason for them to give right now, instead of waiting until next calendar year.