New Charitable Giving Incentives in CARES Act

At the end of last week, President Donald Trump signed into law the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The $2.2 trillion rescue package comes in response to the economic fallout from the coronavirus pandemic. The measure contains a number of provisions to encourage greater charitable giving including:

Universal Charitable Deduction Provision. Taxpayers who are non-itemizers may take an above-the-line deduction for charitable giving up to $300 in cash contributions during 2020. Contributions to Donor Advised Funds are not eligible. While the provision was intended to be temporary, the law itself states it “begins in 2020” and does not contain a sunset date, according to Jason Lee, former Chief Advocacy and Strategy Officer and General Counsel at the Association of Fundraising Professionals. That means that the provision might extend beyond 2020, something advocacy groups will seek to ensure along with trying to raise the $300 cap.

Increase of Itemizer Charitable Giving Cap. For 2020, the CARES Act eliminates the current cap on annual deductible-contributions for those who itemize. The law raises the cap from 60 percent of adjusted gross income to 100 percent.

Corporate Giving Incentives. The law raises the annual giving limit from 10 percent to 25 percent of taxable income. Furthermore, corporations will be permitted to increase deductions for food donations with the cap increasing from 15 percent to 25 percent of taxable income.

Non-philanthropic Provisions for Nonprofits. The law contains several other provisions that can directly benefit nonprofit organizations while not involving philanthropy. The National Council of Nonprofits has prepared a summary of these key provisions, which you can find by clicking here.

Congress may take up additional economic stimulus measures in the coming weeks or months. Such measures could contain additional assistance for the nonprofit sector. In the meantime, Rep. Bryan Steil (R-WI) has introduced a bill to rescind the $25 million grant to the Kennedy Center that the CARES Act included at the insistence of Speaker of the House Nancy Pelosi (D-CA). It’s unclear at this point whether the legislative effort or administrative action can rescind the grant.

Do you think the new charitable giving incentives will help your nonprofit organization?

That’s what Michael Rosen says… What do you say?

2 Responses to “New Charitable Giving Incentives in CARES Act”

  1. Thanks, Michael. This is a great overview, clear and concise. Exactly what I need to answer some questions my donors have been asking.

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