It’s Showtime for Annual Giving
Tomorrow is Giving Tuesday, and the first day of the busiest giving month of the year. Dress rehearsal is finished, the opening acts are done, and you’re on stage live for a month, closing gifts. Welcome to Week 48!
Your time this week is best invested in enhancing the solicitations you have planned. December is when your warm, personal touch goes the farthest because individuals – and many small businesses – are determining what they have available to give to charity. Add notes, make calls, and ask others to do the same.
Who should be at the top of your list? Renewals, of course, and within that pool, start with the people who have the greatest lifetime giving to your organization. Keep that inner circle feeling sure that they are appreciated.
You already know how to tell your story to engage your donors, so as you plan your talking points, I want to give you something extra — tax tips to keep in your back pocket and pull out when you see an opportunity to encourage a donor to make a gift decision. While tax incentives don’t drive people’s emotional impetus to make charitable gifts, it is worth understanding who is most likely to enjoy a tax advantage from giving so you can weave tax benefits into your conversation with certain people.
Schedule A filers generally receive a tax break for giving more to charity. Who might be in that group?
- Single or Married Filing Separately taxpayers – they only have to clear $12,400 in deductions to make a Schedule A worth filing
- Workers paying high local income taxes that count toward their SALT deduction (State And Local Taxes are generally capped at $10,000)
- Homeowners with a mortgage, especially if they bought or refinanced in 2020
- Owners of a first or second home with local property taxes (counts toward SALT)
- Filers paying down student debt can deduct up to $2,500 on qualified loans
- Work-from-home folks who incurred significant home office expenses in 2020
What about people taking the standard deduction? Married filers with one home are often better off choosing the $24,800 deduction, so you can mention that 2020 rules allow an above-the-line adjustment to income of up to $300 for charitable contributions. You can share that helpful tip to your donors who are likely to give in that range to your organization.
Be aware that the CARES Act for coronavirus relief could mean reduced giving this year from some of your older donors. As part of CARES, the IRS waived Required Minimum Distributions (RMDs) for 2020, so your donors who are over 70.5 years of age with IRAs and similar retirement plans don’t have a tax incentive to give in order to satisfy their RMD. Ask for their support, but if they normally make their charitable gifts from assets in their qualified plans, be prepared to be gracious if there is a dip in their giving this year.
You can share tips more broadly if you like. It’s my opinion that tax tips cool off a warm solicitation, so offer that information in a sidebar on your e-newsletter and in social media posts rather than a mission-focused ask.
Have a great week and a happy Giving Tuesday!