As we enter the holiday season, many of us feel especially grateful for our blessings and inspired to share our abundance through individual donations. So, the annual GivingTuesday day of global giving arrives at a fitting time, giving us a chance to put those good intentions into action right when we’re most motivated to do so.
This year’s celebration, set for Tuesday, Nov. 30, will bring together businesses and individuals around the world with the goal of inspiring positive systematic change. The message of GivingTuesday feels especially relevant this year of all years, as we continue to confront a global pandemic and other large-scale societal challenges. The simple goal of trying to make our world better cuts through the negativity we see so often, and focuses on uniting our cities, states and country, as well as our global community.
GivingTuesday and the power of individual donations
At Heritage, some of our most fulfilling work is assisting our philanthropically minded clients in maximizing the impact of their individual donations — on GivingTuesday or any other time.
When people think about giving money, they often get caught up in the mindset that individual donations matter less than the large amounts typically donated by corporations. But that’s actually not accurate — although corporations have more money and often make headlines with their donations, it’s the combined power of individuals’ generosity that truly moves the financial needle for many charitable organizations.
Scott’s transformative approach to philanthropy
A prime example of the power of individual donations is MacKenzie Scott, the ex-wife of Amazon’s Jeff Bezos, who is currently on a quest to give away the bulk of her $60 billion fortune to charitable causes. While the amount she’s donated so far (close to $9 billion) is obviously unusual and very noteworthy, the way that she’s going about her philanthropy is even more interesting.
Her approach is to research charitable organizations, decide on the worthiest recipients, then donate large sums to them with no strings attached. In July, she announced her latest round of donations, a total of $2.7 billion in gifts to 286 arts and racial justice organizations in communities that had historically been underfunded. Many of these organizations had no idea the gifts — the largest they’d ever received by far — were coming, and the effects have been transformative for them.
Scott’s story is unique because of the amount of money involved, but she’s not any different from you or me in the power she has to directly impact charitable organizations through individual donations — which is what we can do on GivingTuesday. As individuals, we have the luxury to promote causes or nonprofits based on our personal passions.
In contrast, corporations tend to attach a lot of red tape, only allowing charitable organizations to use their money for a specific cause or asking them to demonstrate the positive effects of the donation. Similarly, the grant-writing process can be slow and cumbersome, with stipulations attached that limit how the donated money can be used. The result is that charitable organizations feel pressure to deliver for corporate donors in a specific way — even though the actual needs of the population they serve might be constantly changing.
Where to start with giving
If you want to make an individual donation to a charitable organization but don’t know where to start, my advice is to pick a place whose work inspires you and go see for yourself what they do. Have a conversation with a staff member, or even better, volunteer your time. Learn firsthand how your dollars can support the mission of organizations and improve the lives of those they serve.
Thanks to the passage of the CARES Act, 100 percent of AGI cash given to nonprofits is deductible now, so it’s a great time to donate if you want to maximize the power of your money. With the stock market at historical highs, many investors have highly appreciated assets that will incur capital gains taxes if sold. However, by donating those investments directly to charity, the organization can sell them and pay no taxes, and the donor doesn’t have to pay taxes, either.
The great thing about GivingTuesday is that while individual donations are encouraged, what is donated doesn’t necessarily have to be money. I always advise clients to give what they’re willing and able to give. Some people can afford to give a large portion of their income, but depending on an individual’s financial worth, giving time and energy might be a better choice, while also being hugely beneficial.
At Heritage, we can give our clients guidance on how to donate to causes they’re passionate about, either in their own community or anywhere in the world. We can also advise strategies to maximize the impact of charitable contributions, such as charitable trusts for long-term giving and donor-advised funds.
Something that has inspired me about the past year is how eager many people have been to help others in their communities, even as the pandemic has caused upheaval in our daily lives. It’s a great reminder that no matter what lies ahead, we can get through it by lifting each other up.
If you would like additional information about charitable giving, please contact one of our professionals at Heritage and we’ll be glad to help.