How to Donate to Charity During the Pandemic

2. Define “charity” more broadly. Even if you can't make more tax-deductible gifts, that's not all bad, says Ross Levin, an Edina, Minnesota, financial adviser. “When the deductions go away, the real meaning of gifting is established,” he notes.

Instead of giving just to 501(c)(3) charities, you can give directly to people in need. If you're not deducting contributions, their nondeductible status won't matter to you. But protect yourself from scams by avoiding online personal appeals that you can't verify, from people you don't know.

3. Use your IRA. If you are 70 1/2 or older, you are eligible for a great tax break. You can give directly from a traditional IRA to a 501(c)(3) charity without having to declare that amount as taxable income, as you would a regular IRA withdrawal. Make sure that checks are made out not to you but to the charity (which can't be what's known as a donor-advised fund). Required minimum distributions are waived for this year, but in future years you'll be able to use contributions to fulfill all or part of any RMDs that you might be obligated to take.

4. Give assets. Instead of making a cash donation to a charity, offer to make that gift in the form of shares of stock or mutual funds that have risen in value since you've owned them. If you have held the shares for at least a year, you can give them away without having to pay a tax on any capital gains. Levin says that this is a great strategy even for people who don't consider themselves wealthy but who have owned a bit of stock for a long time.

5. Amass your gifts. In 2020 the standard federal deduction, used in lieu of itemized deductions, is $24,800 for couples and $12,400 for single tax filers (slightly higher if you're at least 65 or blind). If your potential deductions, such as mortgage interest and medical care, come close to matching your standard deduction, you can make extra charitable gifts this year (offsetting them with smaller donations next year) and get a larger tax break by itemizing.

Finally, if you are wealthy enough to have significant savings and be in a position to itemize, you get a CARES Act break, too. For 2020 only, you can deduct cash contributions up to 100 percent of your adjusted gross income, instead of the prior 60 percent limit. You could turn “Terrible 2020” into your year to make a grand gesture. 

Linda Stern, author of Living on Your Nest Egg, has been writing about finances since 1980.