As you work to navigate these difficult times as a leader of a not-for-profit organization, it’s important to continue thinking about charitable contributions and your donors.
Recent coronavirus related legislation has provided extensive opportunities to individuals and corporations making charitable contributions during this time. Below, we identify several ways not-for-profit organizations can retain charitable contributions in 2020.
Turn ticket sales into donations
If your organization sold tickets to performances or fundraising events that have been canceled, you can contact ticketholders and request that (if they so choose) their full ticket price be converted into a tax deductible charitable contribution to the organization. As the ticketholders would not receive goods or services in return, they could therefore deduct the amounts.
Consider a virtual event or auction
Maximize contribution revenue for your organization by hosting a virtual event for donors to “attend.” All of the revenue would be recorded as charitable contributions, and you’d have few or no expenses for holding the event.
Many people are using this extra time at home to get rid of items they no longer need. Make the most of this by hosting a virtual auction where attendees can donate their items to be auctioned to the highest bidder. It’s a win-win-win: your organization gets the spotlight and donations; donors get rid of what they don’t need; and bidders win items they desire.
Does your organization have an especially generous donor? Reach out to them and see if they would be interested in holding a personal fundraising campaign on behalf of your organization through social media – whether it be Facebook Live, Instagram Live or another platform. Many celebrities and notable individuals with large followings have also been matching donations given to the organization of their choice. Consider incorporating a “social media” spin on donation matching by attributing every “like” or “comment” on a post to a dollar amount that will be given to the organization by the generous donor.
Take advantage of deduction changes:
- Individual donors for 2020, who do not itemize deductions, can get a $300 above the line tax deduction ($600 married) for contributions to charitable organizations.
- The adjusted gross income limitations for itemized deductions of cash donations by individuals to public charities has been increased from 60 percent to 100 percent for 2020. Donors may be able to receive a substantial benefit from this change.
- Corporate donors giving cash or food to those in need can now deduct up to 25 percent of taxable income instead of 10 or 15 percent.
The ever-changing legislation that aims to offer assistance during the COVID-19 pandemic will have a great impact on the not-for-profit industry. As always, our Sikich advisors are here to help your organization through these challenges. Please continue to check our COVID-19 Resource page for up-to-date information about how your organization may be affected by the recent changes in legislation.