With year-end in sight and the holiday season soon upon us, we are reminded of the value of giving. In Minnesota, we have an entire holiday devoted to supporting the causes that mean the most to us: Give to the Max Day, which has become Minnesota’s annual giving holiday.
This year will mark the twelfth annual Give to the Max Day, which is set to take place Thursday, November 19th. Since its start in 2009, more than 600,000 individuals have made gifts to make a difference for causes in their communities. Through this, Give to the Max Day has helped to generate more than $250 million for over 12,000 nonprofits in its first 11 years.
According to the American Endowment Foundation, the shifting philanthropic climate and new tax laws have significantly decreased the number of smaller donors who itemize charitable contributions, which can make concentrated days like this even more impactful for the charities participating in Give to the Max Day. Smaller donations made to nonprofits whose causes are important to you may have eligible matching funds available so your donation could go even further.
The CARES Act, which was passed earlier this year in response to the coronavirus pandemic, included a provision allowing people to deduct $300 for charitable contributions. Deductions under the CARES Act must be made in cash (cannot be a gift of appreciated stock) and given to a 501(c)(3) charitable organization. Contributions to a donor advised fund would not count towards this deduction. In 2020, if you donate up to $300 in cash to a qualified organization, your adjusted gross income will be reduced by up to $300 as an above-the-line deduction. The deduction amount is the same for single filers and married filing joint.
As you consider whether to participate this year, and which organizations to support, we have put together eight topics to consider:
- How do your potential Give to the Max contributions fit into your broader charitable giving strategy? What is most important to you? Is it important for you to give back during your lifetime, or are you focusing more on leaving a legacy after your death?
- Who else is involved in making decisions about your charitable giving with you? Is this a value you share with friends and family?
- How do you decide which charities to support? Are you personally involved with any organizations as a volunteer, donor, or board member? Are family members or friends involved in organizations you would like to support?
- Do you want to set and stick to a giving budget on Give to the Max Day, or be more flexible?
- Are you looking to give to many charities, or just a few?
- Would you like to make a one-time or a recurring gift?
- Do you prefer to give publicly or anonymously?
- What are the tax benefits of your gift? How can you donate most effectively and efficiently?
While Give to the Max Day can be a rewarding way to contribute to your favorite charities, it’s important to keep in mind your overall charitable giving strategy and develop a plan to make sure you’re maximizing your support for the organizations that mean the most to you. To discuss Give to the Max Day or your charitable giving strategy, please reach out to your JNBA Team.
Please note JNBA is not an accountant and no portion of the above should be construed as accounting advice. All accounting issues should be addressed with an accounting professional of your choosing.
Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from JNBA Financial Advisors, LLC.
Please see important disclosure information at www.jnba.com/disclosure