Don’t Forget About the CARES Act in Year-End Fundraising

Beginning in 2018, the Tax Cuts and Jobs Act (TJCA) made fundraising more difficult for charities and non-profits, doubling the standard deduction to $12,400 for individuals and $24,800 for married couples filing jointly.  That left taxpayers needing to itemize their personal deductions and have them total more than these increased standard deduction thresholds to take advantage of any tax benefits, including those offered through charitable giving.

Only 10% of taxpayers do that.

But, in 2020, the passing of the CARES Act instituted a universal deduction of $300, whether or not one itemizes.  This little-known change has the potential to provide additional leverage when soliciting year-end donations, providing incentive and possibly creating a modest increase in gifts from donors inclined to go the extra mile for their public media station. 

The trick is in how we frame this new taxpayer benefit without getting into the weeds about TJCA and why this $300 deduction is different. The good news is, Congress helped us out by making the CARES Act benefit universal, so crafting a simplified message based on the benefit to the donor may be easier than it sounds. 

I’ll Let You in On A Secret

One way to grab attention with donors is by ‘whispering’ in their ear the secret that “other donors have discovered in the 2020 CARES Act, which is reducing their adjusted gross income by an additional $300, for doing what they’re going to do anyway---give money.”  But the key is to do it by December 31st in order to be counted within the tax year.  Everybody who files taxes in America is eligible for this one-time deduction---it’s universal, just like love!

This is SO not 2020---it’s actually GOOD news!

For non-profits that are struggling for survival, and organizations like the public media station trying to help donors and prospects stay informed in an increasingly complex world, $300 can mean a lot.  The rare GOOD NEWS we have for donors is that the CARES Act has created the potential for additional tax benefits when supporting one or more organizations, up to the additional $300 limit before December 31st.  By creating awareness and urgency, your organization may benefit in the closing weeks of 2020, helping finish a year filled with upheaval on a high note.

Framing is Key

Frame your argument to say that acting on one’s own values now has added value in 2020, but time is of the essence!  Your message to donors as you solicit additional gifts, recapture lapsed donors, renew or upgrade existing donors should be directly tied to this deadline-driven benefit, realized only when a donor does what she was already going to do.