Charitable Giving in Hard Times
By: Nicole Donelson
During uncertain and unprecedented times, it’s easy to feel overwhelmed. When every day unfolds to bring a new change, businesses and nonprofits adjusting nearly every hour, it can all be too much. Many of us want to help, but aren’t really sure where to begin. While we don’t know the exact toll COVID-19 will have on charitable giving in 2020, we do know that we will have to be nimble and approach giving in new ways, just as we have in our own day to day lives.
Here are a few ways we can start.
1. Assess your tools. What do you have that might bring value to the organizations you want to impact? Just like building a budget, identify what you already have and what you are already doing before creating a plan.
2. Be intentional. For many people, giving is reactionary. You give because you are asked. It’s okay to do that, but now might be the time to look at the big picture. Make a list of values either on your own or with your family and identify where you’ve been spending your time and money. When you step back and look at these lists, is it what you had hoped to see? Or do you want to adjust? Even though we are in crisis mode, you don’t have to abandon your values and giving priorities. Instead, now is a great time to lean in and make your efforts more impactful.
3. Use your donor advised fund. Whether you have a fund at a financial institution like Fidelity or Charles Schwab, or hold one at Central Florida Foundation (CFF), this is a valuable tool in times of economic downturn. While there has been recent bad press about these funds, with claims that these are simply tools for the rich to take a charitable deduction and stow away the money, these funds can bring immediate and long-term assistance to nonprofits and initiatives serving the community. Even without knowing every individual’s intent, the majority, especially if held at a community foundation like CFF, are designed for strategic giving. Most donor advised fundholders, including those held at financial institutions, typically give well beyond the 5% required for a private foundation.
So why is a donor advised fund valuable in hard times?
When people start to feel insecure in tough economic times, they look at places they can tighten the belt. Unfortunately, charitable giving is one of the line items people cut back on. However, for those who have a donor advised fund, they can continue giving to the charities they want to help without it impacting their wallet now. This ensures that nonprofits can still benefit despite global changes to charitable giving.
Other thoughts to consider
Philanthropy goes beyond your treasure, to also include your head and heart. Areas of expertise you might have can help nonprofits right now, going beyond a monetary gift. What can you offer that might help meet a need? Do you have a legal background and can offer pro bono work to help buffer legal costs? Do you have access to technology software or devices that might allow nonprofits to be more flexible in adapting to their virtual needs? While ultimately nonprofits are looking for financial support, they also recognize that they need talent to help them adapt now and ensure sustainability for the long run.
A look at the long-term
Lastly, while there are immediate needs for many nonprofits, we all know that long-term recovery could take years. If you haven’t already done so, now is the perfect time to start thinking about your options for planned giving. The simplest approach is adding a bequest to your will. Think about the organizations that you have been giving to or volunteering with year after year. You could have an incredible impact by leaving a gift to them in your will. These types of legacy gifts are just as valuable, if not even more so, to nonprofits, and you can oftentimes be recognized for them today, not just at death. The topic of death is not an easy subject for many, especially in a time like this, but it’s important to have a plan in place.
Remember, your money will either go to Uncle Sam or it could go to impact causes in the community.
Central Florida Foundation works with individuals and families, along with their advisors, to build a plan for legacy. We have flexible tools in place that allow you to set up a fund that can support multiple causes that you care about, and even consider establishing an endowment to ensure a lasting legacy. Either way, take the time to talk with your advisor, and see how you can do something today to help in the future.
Remember, we are in this together, and now is the time for the community to help each other however we can. If it’s helping a neighbor to get groceries, donating supplies to a school’s food pantry, writing encouraging notes to first responders, or making a contribution to a nonprofit. Big or small, our combined efforts are what will keep Central Florida thriving now and in the future.