We’re in the middle of a "generosity crisis," but even donating a small amount can have a big impact on your favorite nonprofits.
The charitable giving landscape in 2024 is a tricky one. Because the truth is, Americans have become less generous in the last few years. According to the most recent “Giving USA” report, charitable giving dropped 2.1% in 2023, and Vox has gone so far as to say we’re in the middle of a “generosity crisis,” as less than half of us now give to charity on an annual basis.
We can lay some of the blame at the feet of inflation, but the biggest culprit may be how we do our taxes. Tax changes that went into effect during the first Trump administration made it far less advantageous for people to itemize their taxes, which dealt a blow to nonprofits that depended on folks making small donations every year, often at the end of the year, to snag a tax write-off.
Of course, tax breaks are hardly the only reason to give back. We give because we believe wholeheartedly in a nonprofit’s mission and we care deeply about the work they do. So, how can we make sure our favorite nonprofits continue to thrive? And how can we know what type of donations and philanthropic efforts will have the most impact?
Nancy Brown, CEO of the American Heart Association shares her top tips for smart charitable giving in 2024.
Small Donations Make A Big Impact
Only have $10 to give this year? We get it. For many Americans money is tight, and charitable giving is a luxury. But even giving just $10 this year can go a long way. Nancy Brown says every single dollar matters to a nonprofit. For the American Heart Association, $10 allows them to give a hands-only CPR kit to a patient, school, or community organization. In other words, it can literally save lives.
“About 360,000 out-of-hospital cardiac arrests happen every year and fewer than 10 percent of the people who have a cardiac arrest will survive, Brown says. “The reason is because the people around them don’t know how to do CPR and chances are, there’s not a defibrillator near them. So we are on a mission to help train everyone everywhere on how to do high-quality CPR.”
Donor Advised Funds Can Help You Donate Strategically
Donor Advised Funds (DAFs for short) are charitable investment accounts that allow your invested money to grow tax-free. And you can contribute cash, stock, or other investments to a DAF, making it a no-brainer for charitable giving. HerMoney CEO Jean Chatzky uses a donor-advised fund to donate to the nonprofits that mean the most to her every year.
“You recommend a grant and they approve the grant and then the money goes out and it gets distributed,” says Chatzky. “And [donors can receive] a deduction on their taxes in the year that you make the contribution to the DAF.” The best part about a donor-advised fund? The money can grow because it’s invested, which allows you to give away more later.
Got Appreciated Stock? You Can Donate It
The stock market has been on a tear lately and an amazing way to increase your charitable giving this year is by donating appreciated stock. But according to a study compiled by GivingTuesday, many people don’t know this is an option. They found that fewer than 6% of charitable donors give stock. Nancy Brown, CEO of the American Heart Association, lays out a few of the benefits of donating appreciated stock.
“If I had $100 one day and that became $1000 dollars, and I donate that stock versus cashing it out and giving the cash to the charity or using the cash for something else, I don’t have to pay capital gains the increase,” Brown says. “I can donate it to the charity and the entire amount of the stock is a tax write-off for the person.”
It’s a win-win situation, both for the charitable organization and for the individual who’s giving.
Bottom Line: The Right Strategies Will Make Your Charitable Giving Donations Go Further
Charitable giving may feel tough this year as we’ve all been feeling the squeeze of inflation. But with the right strategies, you can make a big impact whether you’re donating $10 or $10,000. You got this!
More On Hermoney:
- ‘Tis The Season For Giving Back: Making Your Charitable Donations Count
- I Want To Give Back More — How Do I Do It?
- How To Find Places To Volunteer When You Have Nothing To Give
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