The ways people are giving back to their communities are changing before our eyes. COVID-19 has brought numerous challenges to the tax-exempt sector, fundraising being one of them. The global pandemic has required tax-exempt organizations to get creative over the past year. Traditionally, most fundraising events were held in-person with the goal of achieving high donor turnout. With people no longer being comfortable gathering in large groups, it forced many development professionals back to the drawing board.
According to Blackbaud Institute’s 2020 Charitable Giving Report, overall charitable giving in the United States increased by 2% on a year-over-year basis. Additionally, online giving grew by 20.7% compared to 2019. In 2020, large organizations, with total annual fundraising of more than $10 million, received 9.4% of their total fundraising from online giving.
Philanthropy hasn't stopped, but is starting to look different:
- Automated Monthly Donations – one of the best ways to lock in donor retention and ease the burden of finding the next gift.
- “Days of Giving” – are gaining popularity by focusing on a specific day to generate excitement around the tax-exempt missions people are passionate about.
- Partnering with Other Local Organizations –events like virtual happy hours or game nights with a local brewery or distillery can benefit all parties involved.
- Hosting a Virtual Walk or Run – social distancing at its best, while providing flexibility on date and time.
- Online Auction or Sale –this type of event may require a little more effort, but the nonprofit and the supporter both benefit from this event.
- Sell Local Celebrity Messages – help to raise awareness and bring in donations.
- Virtual “Non-event” – advertised as the one event guaranteed not to be cancelled.
Taxpayers were incentivized to give back during 2020, benefiting qualifying organizations. In March of 2020, Congress passed the CARES Act which enabled taxpayers who elect the standard deduction to take an additional deduction of $300 for qualified charitable cash contributions without itemizing. In a normal year, charitable donations are only deductible for filers who itemize deductions. As individual income tax filings are now due on May 17, 2021, those who have yet to file should be sure to include any qualifying 2020 contributions to reduce taxable income!
Despite the new unique ways of giving, IRS rules and regulations still need to be followed. There are substantiation requirements for donors, and disclosure requirements for charitable originations, in connection with charitable contributions.
The future is looking bright as vaccines roll out, businesses start to reopen, and unemployment continues to decline. Virtual events may be here to stay, but tax-exempt organizations are now equipped with a new arsenal of tactics for fundraising and the sky’s the limit so get creative.
If you have questions or need additional assistance, please feel free to reach out to us.
The information and advice we are providing for this matter relates to COVID-19 legislative relief measures. Because legislative efforts are still ongoing, we expect that there may be additional guidance and clarification from regulators that could modify some of the advice and information provided to you, after the conclusion of our engagement. We therefore make no warranties, expressed or implied, on the services provided hereunder.