It’s difficult to look at the year 2020 and think, “So far, this year has been pretty great!” From political and social unrest to the ongoing COVID-19 pandemic, this year has been a challenge and we think it’s safe to say that many of us are anxious to move on to a new, better year. However, some good news has surfaced. We’re not kidding, there really is a little bit of good news in the midst of all the chaos. According to Fidelity Charitable, 2020 may end up being the best giving year EVER. Yes, you heard us right: The best.
Last year, Giving USA reported a 2.4% increase in charitable giving, which is consistent with the annual trend that Americans are giving more each year. But 2020 was a wild card. While the year is only half over, the numbers are already demonstrating that the trend will continue. In the first four months of 2020, donors in the U.S. recommended 544,000 grants totaling $2.4 billion, which is up 16% from the same four-month period in 2019.
The sectors seeing the most giving were in human services, which include nonprofits that focus on food and shelter. Additionally, we’re already seeing gains in grants to free food programs. In 2019, the period from January to April saw $10 million in grants. This year, the total is already nearly $75 million. So, despite the insanely difficult year it has already been, why is charitable giving on the rise? Kiplinger has some ideas:
- Higher standard deductions haven’t caused individuals and families to take the standard deductions. In fact, 2019 was the second highest giving year ever, falling just barely behind the 2017 record.
- Donor-advised funds have been and are expected to continue growing. In 2007, assets in donor advised funds totaled about $39.8 billion. By 2018, that number was $121.42 billion. This year is expected to see a similar uptick. In fact, a survey by the Community Foundation Public Awareness Initiative saw grants jump by 58% in just March and April of this year.
- The CARES Act, created in response to the COVID-19 pandemic, has motivated many wealthy donors and larger corporations to give more. The Act allows those who are not itemizing their charitable contributions to take a deduction for their charitable contribution of $300 per individual or $600 per person in addition to their standard deduction. Those who do itemize can deduct even more. Previously, individuals could deduct donations up to 60% of their annual gross income. However, the CARES act now allows individual to deduct 100%.
Whether it’s the reasons stated above or something else completely, we are relieved and elated that charitable giving is seeing a surge this year. In the midst of all the bad 2020 has brought, we hope this gives you as much encouragement as it is giving us!