Javascript is not enabled.

Javascript must be enabled to use this site. Please enable Javascript in your browser and try again.

Skip to content
Content starts here
CLOSE ×

Search

Leaving AARP.org Website

You are now leaving AARP.org and going to a website that is not operated by AARP. A different privacy policy and terms of service will apply.

How to Donate to Charity During the Pandemic

As we all cut back on spending, here are a few reasons to help others in tough economic times

spinner image Charity donation concept: ribbon and calculator
Chris Gash

All of us, rich or poor, feel the urge to help one another in this time of sickness and unemployment. Yet the percentage of Americans donating to charity has hit a new low, according to a recent Gallup poll.

The obvious reason is the uncertainty that most households are facing. If you're struggling to keep food on your table, you can't be expected to start handing out money here and there.

And yet the need is great. “Virtually every organization has had to move to remote services or seen increases in demand,” says Stacy Palmer, editor of the Chronicle of Philanthropy. “Any help is really important right now."

spinner image Image Alt Attribute

AARP Membership— $12 for your first year when you sign up for Automatic Renewal

Get instant access to members-only products and hundreds of discounts, a free second membership, and a subscription to AARP the Magazine.

Join Now

Even if you are in a position to give, recent tax-law changes may be holding you back. Currently, only a small minority of Americans are able to reduce their taxes by making deductible contributions, because most filers are now better off taking a standard deduction than itemizing.

Still, there are strategies that lower the cost of giving. Here's how to make the most of them.

1. Get a new deduction. The Coronavirus Aid, Relief and Economic Security (CARES) Act, passed in March, allows taxpayers taking the standard deduction to claim up to $300 in charitable deductions, as well. To qualify, you must give money to what's known as a 501(c)(3) nonprofit — a food bank or religious institution, for example, not a political campaign or a homeowners association. Keep a record of your gifts.

spinner image membership-card-w-shadow-192x134

Join AARP today for $16 per year. Get instant access to members-only products and hundreds of discounts, a free second membership, and a subscription to AARP The Magazine.

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.

See more Health & Wellness offers >

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. 

spinner image membership-card-w-shadow-192x134

Join AARP today for $16 per year. Get instant access to members-only products and hundreds of discounts, a free second membership, and a subscription to AARP The Magazine.

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

Discover AARP Members Only Access

Join AARP to Continue

Already a Member?

spinner image membership-card-w-shadow-192x134

Join AARP today for $16 per year. Get instant access to members-only products and hundreds of discounts, a free second membership, and a subscription to AARP The Magazine.