Even before the pandemic boosted community philanthropy, philanthropists increased their gifts and support for a variety of nonprofits, according to BNY Mellon’s Wealth Management Planned Giving Practice.
BNY Mellon had said earlier it feared the 2017 Tax Cuts and Jobs Act would have a negative impact on the future of giving, but that has not happened, according to the BNY Mellon Wealth Management’s 2020 Annual Charitable Gift Report, which compiled 2019 results.
The number of charitable gift annuities rose 21% over the prior year and the average gift amount was up by 56%, suggesting non-profits should consider an increased focus on marketing gift annuities, BNY Mellon said. A charitable gift annuity is a planned giving vehicle. An annuity involves a contract between a donor and a charity through which the donor transfers cash or property to the charity in exchange for a partial tax deduction and a lifetime stream of annual income for the donor from the charity.
“Charitable gift annuities have remained a consistently popular way to give. For many non-profits, it is a great way to create lifetime engagement with donors at all levels of support and can open the door for deeper conversations about other ways to make an impact with their giving,” Crystal Thompkins, national director of gift planning services at BNY Mellon Wealth Management, said in a statement.
The study also researched more recent changes due to the pandemic. ‘Key shifts that non-profit organizations are making in response to Covid-19 include changing the tone of marketing messages and focusing on specific giving strategies.” BNY Mellon said.
“There is an increased focus on legacy and intergenerational giving through estate plans,” Thompkins said. “The increased deduction for cash gifts in 2020 and the impact of low interest rates are leading many non-profits to focus on split-interest life income gifts that provide current benefits to donors who want to both make an impact and be assured of financial security. Despite these incentives, however, non-profits are concerned about the impact of the economy and election on support for their organizations.”
BNY Mellon recently held its 16th BNY Mellon Wealth Management’s Planned Giving Conference. Recommendations from the conference included creating a digital communications and social media strategy paired with personal, safely distanced outreach and connection, and monitoring how legislative changes create opportunities for donors to serve their families and their values.