Skip to main content

CARES Act Charitable Opportunities + Fundraising Tips You Can Take Advantage of Now

In the video below, Mariah Brook, Gift Planner at the Saint Paul & Minnesota Foundation, dives into how the CARES Act affects charitable giving and how you can take advantage of the fundraising opportunities.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act was passed by Congress and signed into law on March 27, 2020. The CARES Act was designed to provide economic aid for individuals and small businesses, as well as preserve jobs for American industries. The Act includes three specific provisions that relate to charitable giving and offer nonprofits unique fundraising opportunities during this challenging time.

Sec. 2203. Temporary waiver of required minimum distribution rules for certain accounts

This provision suspends required minimum distributions (RMD) from certain retirement plans and accounts, including traditional IRAs. Some fundraisers have worried that this suspension will decrease the number of qualified charitable distributions (QCDs) that they receive from their donors this year.

However, even though donors don’t have to take their RMD in 2020, it is still to the advantage of many donors to make a QCD as it could lower the amount of future RMDs and also allows donors to make an impactful gift to charity in a time when they may be cash sensitive. For many older donors, QCDs are still the most tax-efficient way to make charitable gifts. Nonprofits may also be able to motivate donors to give a QCD earlier in the year rather than waiting until the end of the year, which is the typical deadline.

Additionally, repeat QCD donations can open up conversations with donors about planned giving, specifically including an organization as the beneficiary of their IRA. This not only benefits the nonprofit with a substantial legacy gift, but also the donor’s heirs, since they will not have to pay estate taxes on the IRA funds given to charity.

Sec. 2204. Allowance of $300 above the line deduction for charitable cash contributions

The segment of donors that this provision benefits are non-itemizing cash givers. One way to cultivate gifts from this type of donor could be by marketing the nationwide trend to #pledgemycheck or #sharemycheck in your social media posts, both of which represent movements to encourage those who do not need their stimulus check to consider donating a portion of it to charity.

Sec. 2205. Modification of limitations on charitable contributions during 2020

For individuals, the 60 percent of adjusted gross income (AGI) limitation is suspended for 2020 and donors can deduct up to 100 percent of AGI. This stipulation in the CARES Act changes the limitation of deducting up to 60 percent of a donor’s AGI to 100 percent for 2020. Prior to the CARES Act, if a donor earned $100,000 and gave away $100,000 in the same year, the donor could only deduct $60,000 and the additional $40,000 would have to be carried forward and deducted in future years (up to five years).

Under the new legislation, a donor can earn $100,000 and deduct $100,000 for charitable contributions, thus significantly decreasing their taxable income. This provision applies only to cash gifts made directly to charities. The primary fundraising opportunity this provision presents is for donors who are still receiving income and also have excess cash.

Where do we go from here? Here are two ways to further take advantage of the CARES Act’s charitable provisions:

More Stories

Why I Partner with a Community Foundation

Attorney Jacqui Dorsey shares five reasons she values her work with the Saint Paul & Minnesota Foundation.

Learn More

How to Donate Crops and Other Farm Assets

Learn how giving crops, farm equipment or livestock can allow farmers to support nonprofits they care about.

Learn More

How to Partner with the Foundation to Support Your Nonprofit Clients

Learn audit director Cathy Lydon’s tips for fellow advisors when working with nonprofits.

Learn More

The Gift of Cryptocurrency

Here’s how to make virtual currency part of your charitable giving plan.

Learn More

Three Benefits of Donating Real Estate

Charitable contributions of real estate are a great way to give back to causes you care about. Here are three benefits to giving real estate.

Learn More

What are Non-Cash Assets?

Donating assets like real estate or cryptocurrency can allow you to make a significant impact on your favorite causes.

Watch the video

What Is a Community Foundation?

Learn how a community foundation works and can help you achieve your charitable goals.

Watch the video

Benefits of Donating a Business or Donating Private Stock

Here’s why you should consider making charitable giving part of any business exit plan.

Learn More



* Indicates a required field