The end of the year is traditionally the time when taxpayers rush to get their last-minute charitable contributions made so they can write off the deductions on their taxes before April 15.
The trends this year appear to be positive for many charities as they saw their donations increase, perhaps to a level not seen since the financial crisis. The question for many charities this year was whether charitable giving would return to pre-recession levels.
“Last year, it was pretty close, but hadn’t quite hit the same marker,” said Eileen Heisman, CEO of the National Philanthropic Trust, one of the largest grant-making institutions in the U.S. “We don’t have the numbers and won’t have them until June, but I would guess that we have rebounded, from the way the stock market was, and with the economy growing in real terms.”
Heisman cited a recent report by the Chronicle of Philanthropy that found gifts of a million dollars or more on the increase after hitting a low in 2010. While the numbers reflect an increasing number of million-plus donations by ultra-high net worth taxpayers, even the moderately wealthy appear to be giving more generously in recent years. However, the vast majority of taxpayers who have been experiencing stagnant wages in recent years may not be ready to increase their charitable donations this year.
“For the wealthy Americans who have assets, they are being generous with them,” said Heisman. “I would guess that we’re going to hit pre-recession levels.”
One of the main ways that wealthy donors are making charitable contributions is giving appreciated publicly traded securities. “That’s a very tax-efficient way for a donor to give, to avoid capital gains taxes and get a full fair market deduction for the gift against their gross income,” said Heisman. “Charities are always trying to educate donors who are sophisticated that that’s a great way to make a gift.”
The Baby Boomers are still dominating in actual dollars spent and are the biggest chunk of donors right now.
Charities are also keeping a close eye on how Generation X and Generation Y donors are giving. “From a philanthropic point of view, they’re very engaged generations, doing more online than the Baby Boomers and the Greatest Generation,” said Heisman. “Their engagement in philanthropy is much more digital than the older generations. The Baby Boomers are still dominating in actual dollars spent and are the biggest chunk of donors right now. They’re still giving a lot through direct mail and traditional ways. But if you’re looking at what’s going to be happening in the future, we’ll probably see a lot more digital philanthropy.”
Social media has made a big impact on charity this past year with the Ice Bucket Challenge, which raised approximately $115 million for the ALS Association. A number of accounting firms got involved last summer in the challenge to help with research and treatment of ALS, also known as Lou Gehrig’s disease. Last month there were initiatives such as Movember and No-Shave November to benefit cancer charities such as the American Cancer Society. The popularization of Giving Tuesday through its Twitter hashtag, #GivingTuesday, helped raise funds for a large number of charities as well this month.
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“This is the third year for Giving Tuesday, and I think this is the year that it really took off,” said Heisman, who is a Giving Tuesday ambassador. “They raised something like $47 million online that day, and I think they had almost 20,000 partners. The first year, they had 2,500. It was global. Its impact is becoming really hard to measure. All of the online fundraising systems said there was tremendous activity, and people who were naysayers are turning around now saying they were doubters at first, but now they think it’s a really good idea. I think it’s going to become a new normal. There’s going to be a time when we’re not going to remember when it started. To me this was the year to prove it’s going to be around for a very long time.”
Original Article: http://www.accountingtoday.com/blogs/debits-credits/charitable-giving-rebounded-this-year-73166-1.html
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