In the philanthropy world, Giving Tuesday ranks as one of the most important days of the year. In fact, it is the third biggest giving day, just behind December 30 and 31. What started as a humble, grassroots campaign has blossomed into a massive, global movement that encourages radical generosity and charitable participation.
To illustrate the philanthropic magnitude of this day in the United States, just look at some statistics from GivingTuesday 2022:
• Nonprofits raised $3.1 billion—a 15% increase over 2021.
• 35 million people participated—roughly 13% of the country’s population.
• Online donations exceeded $1 billion for the first time on a Giving Tuesday.
While many donors make a single cash contribution on Giving Tuesday, research shows that these individuals want to do more to commemorate the day. They want to increase their impact and level up their charitable investment in your organization.
Leading up to Giving Tuesday (November 28, 2023), you may want to share information on the idea of a blended gift—essentially, any combination of gifts that best suits the donor’s situation and helps meet their philanthropic goals. In this case, donors may be interested in combining their usual cash gift with a noncash gift or a future gift. Make sure these donors are aware of their options and the associated tax benefits.
A gift from an IRA
For donors age 70½ or older, there are two options for making a tax-free qualified charitable distribution (QCD) directly from an IRA—a gift that counts toward their required minimum distribution (RMD) if one is due (typically, starting at age 73).
1. The traditional QCD lets donors make a tax-free gift of up to $100,000 per year directly from an IRA to a qualified charity.
2. The new QCD option lets donors use up to $50,000 from an IRA to create a new charitable gift annuity (CGA) or charitable remainder trust (CRT)—a great way to give and create a new income stream for the donor and/or the donor’s spouse. Spouses can combine distributions from their own IRAs to create a single CRT or a joint life CGA.
For retirees, reducing taxable income can also have a positive ripple effect on their Medicare benefits and Social Security payments.
Appreciated assets
Donors can enjoy a significant tax advantage by giving appreciated assets (like stock or real estate) held for longer than one year. The donor generally avoids paying capital gains tax on the appreciation and can receive an income tax charitable deduction for the gift’s full fair market value. Your organization can also greatly benefit from these donations. In fact, nonprofits that accept appreciated assets like stocks grow five times faster than those that only accept cash.
Donor-advised funds
A recent Institute of Policy Studies survey revealed that only 19% of those surveyed were aware of donor-advised funds (DAFs) and how they work. This presents an opportunity to educate donors on this beneficial giving option. Donors may appreciate learning that they may be able to donate more complex noncash assets to a DAF, greatly simplifying the donation process. A DAF contribution qualifies for an immediate charitable income tax deduction, and assets enjoy professional management and tax-free growth. In addition, the donor then has the flexibility to recommend grants from the DAF when the time is right—perfect for donors who may want to secure a larger deduction this year but spread out their actual gifts over a period of years.
An easy legacy gift
According to the National Association of Estate Planners and Councils, 56% of Americans do not have an up-to-date will and may be receptive to learning how to include your organization in their estate plans.
1. Charitable bequests are one of the simplest and most powerful ways to give and can help secure the future of your nonprofit without impacting the donor’s current finances. While donors don’t tend to make or update their wills during the holiday season, there’s never a bad time to plant a seed and spark a conversation.
2. Charitable beneficiary designations are even simpler and just as powerful. Donors can easily make your organization the sole or partial beneficiary of a life insurance policy, retirement account, or other financial account.
By using Giving Tuesday as a springboard to discuss planned giving options, you reveal to donors more beneficial ways to give in addition to their regular cash donation. This expansive method of giving can have a truly valuable impact on your organization for years to come.
