Year-End Charitable Giving Strategies

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At the time we’re writing this message, Halloween is upon us, and Thanksgiving and Christmas are around the corner. During this time of year, we begin contemplating the charitable gifts we’d like to make before December 31st. It’s a critical time to give generously to support our communities while taking advantage of tax benefits.

You may be considering making a gift to your fund or your local affiliate foundation’s fund, or you may wish to start a new fund at NCCF. Whatever your charitable giving goal, the development team stands ready to support you this giving season.

CARES Act and 2021 Charitable Giving:

The charitable giving incentives included in the 2020 CARES Act were extended through the end of 2021: 

  1. Taxpayers who do not itemize their charitable deductions can claim a tax benefit up to $300 (individual) or $600 (married couple filing jointly) for cash gifts made to public charities in 2021. 
  2. Taxpayers who itemize their charitable deductions may deduct cash contributions to public charities up to 100% of their adjusted gross income in 2021, an increase from the usual 60% limit.

    The increased 100% AGI limit does not apply to: 
    • Gifts of non-cash assets like stock or other illiquid assets;  
    • Gifts made to donor advised funds (DAFs)
    • Charitable contributions carried forward from a prior tax year.

    You are still able to make a cash gift to your DAF and deduct up to 60% of AGI.  If you’d like to take advantage of the 100% AGI limit, consider blending cash gifts to your DAF and an NCCF agency endowment or to your local NCCF affiliate’s endowment.  You could also establish a designated fund to provide annual support to your favorite nonprofit organization, or start a scholarship endowment to support continuing education in North Carolina.

  3. Corporate taxpayers may deduct up to 25% of their taxable income in 2021, an increase from the typical 10% limit.  Like the incentives for individuals, the company’s charitable gift cannot be made to a donor advised fund.  If you’d like to work with NCCF and take advantage of this incentive, consider started a scholarship fund or making a gift to your local NCCF affiliate’s community fund.