Every part of the world has felt the impact of the coronavirus. While it has affected people in different ways, the health and economic shocks have proven to be substantial. The virus has reshaped the nature of our lives from how we conduct business to the way we interact with family, friends, and loved ones. For many, it has also taken a serious toll on their finances.
The U.S unemployment rate skyrocketed to unprecedented levels, once stay at home orders were instituted, and the economy seemingly came to a halt overnight.
In this season of financial and economic volatility, many have wondered how charities and the people they serve would fare. But studies show that philanthropy has played a significant role in furthering charitable efforts throughout the pandemic.
Today, we are going to look at the vital role of philanthropy during the pandemic.
The numbers don’t lie
The New York Times reported in June that Americans donated at a rate which surpassed giving during the 2008 recession and the September 11, 2001, terrorist attacks. Philanthropists are rising to the challenge and working to provide resources for those in need. This growth in giving began in March and has continued expanding since.
Fidelity Charitable, one of the largest charitable grant-makers in the country, conducted a study that found 54% of donors anticipated maintaining their giving strategy despite the pandemic, with 25% of people projecting to increase their donations. Of those who planned to give more, the top reason cited was to meet the current unprecedented needs followed closely by the desire to help.
Fidelity Charitable manages a copious number of individual donor-advised funds and found that donors have already given over $3.4 billion this year, which is a 28% increase from last year.
The three most popular giving sectors are Religion, Human Services, and Education. Not surprisingly, the Human Services sector saw a surge of donations. Free food organizations saw a 667% increase in grant recommendations, and local food banks became the most popular non-profit in 38 states.
The Community Foundation Public Awareness Initiative also found that grants from donor-advised funds had increased in response to the pandemic. Tracking 32 community foundations in 21 states, donors gave $203.1 million from March through May alone. That is an increase of 80% from 2019 figures. Additionally, The Boston Foundation reported that donations increased by 246% from 2019 to 2020 totaling $10 million in grants.
These widespread figures illustrate the surge in donations made at a critical point in our history. Charitable giving is a crucial part of our society, but it became even more vital with rising needs in both the medical and financial spaces. It has held a significant role for many individuals, families, and foundations for years, and the coronavirus doesn’t show signs of that changing.
How to build a giving strategy you love
Charitable giving can play a prominent role in your financial and personal journey. It’s important to create a plan which aligns with your goals, values, priorities and vision for the future. Often giving becomes a significant aspect of your legacy, including the values and tenets you pass down to the next generation.
You want to build a plan that works for you now but also remains strong and consistent in the future. Here are a few things to consider when creating your giving strategy.
- Evaluate popular donation vehicles like donor-advised funds, qualified charitable distributions, and private foundations to find the donor strategy that works best for your specific situation. An effective giving strategy should allow you to support the causes which are important to you.
- Give with your heart. It is important to donate to causes you and your family are passionate about. This approach will help carry on giving as a tradition and staple in your financial life.
- Implement tax-efficiency into your giving. Being tax-savvy means you can maximize your gift to the places that mean the most.
- Donate thoughtfully throughout the year. 30% of all charitable donations happen in December alone. While giving at any point of the year is fantastic, try to spread out your donations throughout the year. This technique is a great way to implement charitable giving as a regular piece of your financial life.
Charitable giving is a magnificent tradition. With a strong strategy in place that takes your entire financial picture into account, you can make the most of your charitable efforts.
Our team can help
Compardo, Wienstroer, Conrad & Janes thrives in helping families craft their philanthropic strategy backed by their unique vision and value system. Everyone has a specific goal and concept for how they want to structure their philanthropic plan. Our team gives you the tools and resources to:
- Curate your philanthropic values, goals, and mission
- Build community impact and visibility
- Create a planned giving strategy and collaborative grantmaking process
Whether you are just starting out and have a few questions, or already have a donor plan in place which isn’t entirely working for you, contact our team today.
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