4 smart ways to give back in a time of need

Here’s how you can extend help to others if you can’t volunteer in person.

After planning for their financial security, one of the most common goals of retirees is to give back to the causes they are passionate about. This often includes remaining active in the community and pitching in with hands-on volunteerism.
With the coronavirus pandemic forcing people to stay at home, volunteering in person may not be a safe option right now, especially if you’re in a higher-risk category. But that doesn’t mean you can’t give back. At the same time, you don’t want your giving strategy to put a dent in your budget, especially when you’re living on a fixed income. Here are four things you should consider about charitable giving to make sure you also keep your retirement strategy on track.

1. Know the new rules for gifts

In March 2020, the federal Coronavirus Relief, Aid, and Economic Security (CARES) Act was passed to provide financial support to individuals and businesses during the pandemic. It has a couple of components that affect annual charitable giving for 2020.
  • You can deduct up to 100% of your 2020 adjusted gross income (AGI) for cash gifts to public charities (up from the usual 60%). If the value of your gifts exceeds 100% of your AGI, you will carry any excess gift amounts into next year.
  • If you do not itemize deductions on your federal tax return, you can now take a charitable deduction of up to $300 for cash donations made to qualified organizations in 2020. This change benefits those who typically do not itemize their deductions and therefore typically do not receive a tax benefit from their charitable contributions.
When you give back in 2020, keep the CARES Act in mind as you file your taxes. You’ll also want to watch for potential changes to the rules around gifts in 2021.

Top 5 charitable causes

In 2019, these types of organizations received the most charitable giving. With new rules for deductions and an increased focus on healthare needs, the numbers may shift for 2020.
Source "Key Findings From Giving USA 2019: The Annual Report on Philanthropy," givingcompass.org, 2019

2. Donate stocks or bonds

Donating retirement income is not the only way you can financially support your favorite causes. You can also give stocks or bonds from your portfolio to the charities of your choice, and this may end up being a more tax-efficient method of giving. This includes securities like publicly traded stocks, bonds, and mutual funds. And, because you’d be donating them, you would be able to deduct the full fair market value of the assets without having to pay a capital gains tax on them. Better yet, neither would the charity.
If you plan to donate stocks or bonds, be sure to speak to a tax professional as well as your financial advisor so you understand the tax implications as well as the effect on your investment portfolio.1

3. Try a giving fund

One of the most effective ways to manage your charitable donations is through a donor-advised fund. A donor-advised fund is a charitable vehicle offered by many foundations and financial institutions. Once you’ve established a donor-advised fund account with cash or other assets such as stocks or bonds, you can invest the money you’ve put into the fund. This gives it a chance to grow tax-free for as long as you need it to. Usually, you can also receive a charitable deduction when you fund the account. In addition to its tax advantages, a donor-advised fund makes it easy for you to act as  both donor and advisor, because you control when and to what organization each donation is made.

4. Volunteer from home

While you may not be able to volunteer in person right now, organizations around the country are looking for virtual volunteer support to help them manage through the pandemic. If you have a writing background, you may be able to help with communications. Some organizations are looking for volunteers to call people who are typically recipients of the charity’s offerings to make sure they are healthy and have everything they need. Or use your sewing skills to make masks that may help slow the spread of the virus and protect those most vulnerable.
These four options are good places to start thinking about strategically planning
your charitable efforts. When there are so many more people in need—and so many organizations working overtime to help fill those needs—it’s important to continue to be a part of the giving conversation.
1The TIAA group of companies does not provide legal or tax advice. Please consult your legal or tax advisor.