4 Reasons It's Time to Revisit Cash Giving Conversations

As we continue to navigate the evolving philanthropic landscape, it's an opportune moment to re-engage donors in conversations about cash giving incentives. The disincentives introduced by the 2017 Tax Cuts & Jobs Act, particularly the near doubling of the standard deduction, led to a significant decline in itemized deductions, dampening the appeal of charitable giving for many taxpayers.

Indiana's Lily School of Philanthropy found that charitable giving decreased by $20 billion in the first year after the implementation of these disincentives. This drop caused devastating reductions in mission resources for our country's non-profit organizations. Thankfully, the latest tax legislation allows for $1,000 in deductions for gifts to charity for non-itemizers! (The deduction is $2,000 for joint filers.)

However, recent legislative updates and economic shifts are beginning to reshape the conversation:

Here are four angles to consider as you re-engage cash donors:

1. While the CARES Act allowed non-itemizers to deduct up to $300 ($600 for joint filers) in cash gifts to public charities in 2020 and 2021, this provision has since expired. Still, its popularity signals donor interest in accessible giving incentives.

2. With inflation and rising healthcare costs, more taxpayers, especially older donors, are approaching thresholds where itemizing may again make sense, bringing charitable deductions back into play.

3. Some states have introduced or expanded charitable tax credits, offering new opportunities for strategic donor engagement.

4. Donors considering larger gifts or estate planning may be more receptive to discussions about immediate cash contributions as part of a broader philanthropic strategy.

Fundraisers have a unique opportunity to educate and inspire donors by aligning their generosity with smart financial planning. Let’s help them see how their gifts can make a meaningful impact, both for the causes they care about and their own financial well-being.

If you have questions, I am here to help.