A majority of Americans plan to give to charity yet this year, but apparently they will leave it until the last minute, according to a Fidelity Charitable survey released today.
Although two-thirds of Americans said they will make charitable donations in December, 60% said they will finish their gift shopping before they make philanthropic contributions, the Fidelity Charitable survey of 1,500 adults who gave at least $1,000 to charity last year said. An equal percentage said they would rather have a charitable donation made in their names rather than receiving a gift.
“At such a busy time, it’s easy to put off year-end charitable decisions, but there are advantages to acting early to maximize your ability to support your favorite causes and to take advantage of 2021 tax benefits using smart giving strategies,” Kristen Robinson, chief operating officer at Fidelity Charitable, said in a statement. “While we encourage people not to run down the clock for practical reasons, we also think it will be particularly meaningful for people to integrate charitable activity into their holiday traditions this year, after another challenging year that has reinforced the importance of supporting our communities and each other.”
According to the survey, 53% of those participating in philanthropic activities said they will give cash to charity, while 46% said they will donate goods, 27% said they will give directly to individuals in need, 25% said they will “perform random acts of kindness” and 20% said they will volunteer for a worthy cause.
Fidelity Charitable offered several tips for efficient and impactful giving.
Philanthropists should search for organizations that offer a match for their gifts in order to increase the impact of the donation with no additional out-of-pocket costs to the donor.
When looking for the perfect gift for someone who does not need anything and to avoid supply chain issues, individuals should consider giving to a charity in the person’s name, rather than buying a gift. “If you prefer to give a traditional gift, consider purchasing it from charities or from businesses with a social or charitable benefits,” Fidelity Charitable said.
Philanthropists should consider giving through a donor-advised fund, which can help avoid the scramble at the end of the year, Fidelity Charitable said. Through a single donation of cash, stock or other assets the donor can be eligible for an immediate tax deduction and funds can then be used to support charities over time. Even without a donor-advised fund, those making contributions can use “a tax-smart bunching strategy of making multiple years’ worth of charitable gifts in a single year to increase tax savings.” Fidelity Charitable includes a donor-advised fund.
Donors also should look beyond cash, Fidelity Charitable said. “Investors are subject to capital gains tax upon the sale of long-term appreciated assets, and after a year of strong returns in the stock market, many investors are left with significant appreciation. Donating assets other than cash to charity, such as securities from brokerage accounts, company stock options or cryptocurrencies, can help minimize the capital gains tax and leave more to give to charity. The donor should keep in mind that complex assets take additional time to process, and donations must be received by Dec. 31 to be eligible for a tax deduction this year,” Fidelity Charitable said. The CARES Act passed in late 2020 created charitable opportunities, including increased tax incentives for cash donations that should be taken into consideration.