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How can we encourage contributions now?

Your Legal Questions Answered

How can we encourage contributions now?

Is there a way we can encourage our small-donor base to help out during the current coronavirus emergency?  We can use every penny we get.

The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act provides a special deduction for charitable contributions up to $300 for all taxpayers who don’t itemize on their tax returns.  The increase in the standard deduction in the 2017 tax act (See Ready Reference Page: “Tax Bill Not Good for Nonprofits”) has eliminated the economic benefit for charitable contributions for about 30 million filers who no longer itemize their deductions and the total of charitable contributions actually dropped between 2018, the first year of the applicability of the new rule, and 2017.  Current itemizers will, of course, get to itemize a contribution in any amount.

The CARES Act provides a deduction for any taxpayer who does not itemize up to $300 for a charitable gift made in 2020, so long as the contribution is not made to a 509(a)(3) “supporting organization” (See Ready Reference Page: “Supporting Organizations Qualify as Public Charities”) or to a donor advised fund (See Ready Reference Page: “Donor Advised Funds Still Compare Well With Private Foundations”)  The provision does not meet the request from the sector for a permanent “universal deduction” up to $3000 a year, but offers a slight temporary benefit during the crisis for gifts given directly to operating charities.

Monday, March 30, 2020


How in GOD’s name can you send out a mail explaining how to ask for money in these times?

Because many charities are providing critical life-sustaining services in these times and may have to go out of business if they cannot sustain themselves.    

Andrea, our community theatre depends on income from ticket sales, which has ceased completely since we are all ordered to stay home. Without additional contributions, we have no way to pay utilities, maintenance, etc.

Thanks Don for your wise and sensitive response to questions like this!

Dealing with this medical and economic crisis asks a lot of us. Among the many more immediate challenges we face, this is a time to give careful thought to its impact on the nonprofits that brighten our lives and support the values of our communities. If ever there was a reason to survey the things outside our doors that matter to us and the community, this is it. Whether asked or not, now is when we should be thinking of how we can help preserve those institutions so that when the clouds lift they will continue to enrich and preserve our lives.

Charities are conditioned and have drilled into them by donors and boards that they should be sustainable. Sustainable means you can sustain the charity during times of need…. If we are all to be sustainable, i.e., we are all told to have six months of emergency fund, shouldn't that also apply to the charities?

I agree that it would be wonderful if all charities had a reserve of six months of liquid assets in an emergency fund, but the fact is that very few of them do.  Many smaller charities have less than a month or two of expenses in reserve.  
But even if they have six months in reserve, they have to work during those six months to raise more revenue, because if they don’t, they will run out of money and be unable to continue their work.  With charities that frequently give away a substantial part of their services and have no way to charge for them, continuous fundraising is critical. --Don Kramer

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