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Ordinary Ways to Give Back During Extraordinary Times

Key Points
  • From small personal gestures to larger contributions, if you have the desire to give back to your community, now is a perfect time.  

  • Always do your research in order to avoid fraudsters and to maximize your gift’s impact.

  • The CARES Act provides a greater opportunity to take a charitable tax deduction with a cash donation in 2020. A donor-advised fund is another good choice for tax-efficient giving.

Dear Readers,

From singing on the balcony to community cheers for those on the front lines to young people grocery shopping for elderly neighbors, people around the world are reaching out in support of others during these difficult days. If there's a bright spot to what we're all going through, it's that a crisis seems to bring out a positive side of our human spirit—the desire to help.

Today, with so many people facing extraordinary personal and financial challenges, there are lots of ways for all of us to help. From small personal gestures to larger contributions, if you have the desire to give back to your community, now is a perfect time.

Show your appreciation by giving what you can

While many of us stay safely at home, there are others performing extra services. Are you having your groceries delivered? Ordering take-out? Tip generously. Or how about buying gift cards from a small business or restaurant? Whatever and however you give, any extra dollars you add will be greatly appreciated—and are well deserved by those out there risking their own safety for the good of others.

There are also many people who help us in our everyday lives whose incomes have taken a big hit—people like nannies, housekeepers and landscapers. If you have the means, consider keeping them on your personal payroll. If that's not possible, consider offering to pay them something in advance until things get back to normal.

The extra money you can afford to give will mean a tremendous amount to the individuals you pay. But don't overstretch your finances; give only what you can. Even a little can mean a lot. And the fact that you care enough to offer may mean even more.

Small personal gestures have a big impact

Of course, it isn't always about giving money. Check with older neighbors to see if they need something from the market or the pharmacy and offer to pick it up for them. A friend of mine in her 70s made such an offer to her 90-year-old neighbors. Then she was offered the same courtesy by some 50-year-olds who live across the street!

No matter your age or your need, just knowing that someone else is willing to look out for you can make all the difference.

Supporting your community expands your reach

As incomes are reduced for many people, so are contributions to community charitable organizations like food banks and other services for families in need. If you're uncertain what exists in your community, do a little local research. Feeding America has a tool for finding your local food bank. Great Nonprofits can help you zero in on organizations in your area, giving you information about what they do and what they need.

Also, think about the skills you have and how you could give of your time. Are you particularly tech savvy? Maybe you could offer assistance to teachers struggling to keep up with offering classes online. Are you good with a sewing machine? Sewing masks for friends, extended family or even local merchants could become a new specialty. Or consider reaching out to a local senior community. Helping isolated seniors could be as simple as making a phone call to say hello.

It's easy to give locally or globally

Many organizations are expanding their programs to meet specific COVID-19 related needs. Two that are particularly meaningful to me are DonorsChoose and Boys & Girls Clubs of America (BGCA). DonorsChoose is helping teachers provide materials to their students now learning from home. BGCA has created a relief fund to provide meals, offer virtual learning and more. 

Global Giving is a crowdfunding organization currently providing COVID-19 relief. Organizations such as UNICEF and Save the Children focus specifically on helping kids around the world through this crisis. And of course there are so many more organizations in need of support.

Do your research before you give—and beware of fraudsters

If you're uncertain where to direct your contributions, want to zero in on a specific charity, or compare charitable organizations, sites such as Charity Navigator or Guidestar are excellent resources. You can get detailed information about the purpose, track record, financials and reliability of hundreds of nonprofits.

They also provide advisories about charities that don't meet specific standards. And in a world where fraudsters are rampant, this is especially important. The Federal Trade Commission warns that fake charities and fundraisers use the same tactics to reach donors as legitimate charities, whether face-to-face, by email, phone or social media. It's especially important to do your research before giving out any personal information or making a donation.

Make giving a tax-smart part of your financial plan

I always encourage making giving a part of a financial plan. It's not only a way to share your good fortune, but also can have tax advantages for you and your family.

To encourage giving and make it easier during the pandemic, the CARES Act provides a new “above the line” charitable contribution deduction of up to $300 if you claim the standard deduction in 2020. For people who itemize deductions, it expands the limits on charitable contributions from 60 percent up to 100 percent of 2020 adjusted gross income. 

Donor-advised funds are a great way to give today and tomorrow

A donor-advised fund provides another great way to save on taxes at the same time that you contribute to causes you care about. You can donate cash or investment securities (like stocks) and then use the funds to make grants to most 501(c)(3) organizations. Any money not distributed may be invested, potentially increasing the amount available to give. 

While contributions to a donor-advised fund aren’t part of the CARES Act expanded charitable deduction limits, you can typically gift appreciated stock directly to your donor-advised fund without having to pay capital gains taxes. This can leave you with even more money to direct to your favorite charities. Your tax or financial advisor can help with the details.

To me, giving back—no matter how you choose to do it—has a lot of benefits for both the giver and receiver. And in times like these it's especially important, not only as a financial strategy, but as a very personal gesture with immediate results that can have a lasting effect.

 

Have a personal finance question? Email us at askcarrie@schwab.com. Carrie cannot respond to questions directly, but your topic may be considered for a future article. For Schwab account questions and general inquiries, contact Schwab.

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A donor's ability to claim itemized deductions is subject to a variety of limitations depending on the donor's specific tax situation. Consult your tax advisor for more information.

Contributions made to a donor advised fund are considered an irrevocable gift and are not refundable.

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The information provided here is for general informational purposes only and is not intended to be a substitute for specific individualized tax, legal or investment planning advice. Where specific advice is necessary or appropriate, consult with a qualified tax advisor, CPA, financial planner or investment manager. 

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