As the coronavirus pandemic strains nonprofits like never before, donor-advised funds (DAFs) give individuals an opportunity to make a big impact with their donations. Learn more about why you should consider giving through your DAF this year.
The holiday season is here with Thanksgiving, #GivingTuesday, and celebrations from Christmas to Kwanzaa that encourage us to give. Another date that’s part of this season of giving is Dec. 31—the end of the tax year. That’s the deadline for US taxpayers to make donations that will count toward their potential tax refund for the year.
At this crucial time when nonprofit organizations are working to obtain funding to continue their missions, people with DAFs can make an outsized impact with their donations before the tax deadline.
Here are three reasons why you should consider making a gift from your DAF during the holiday season:
1. Releasing your funds now lets nonprofits prepare for 2021.
DAFs are unique because a tax credit is given for putting money into a DAF account. That means a donor can receive tax credit for their deposit before the donation reaches the nonprofit organization.
If you’re a DAF holder with funds in your account this holiday season, consider releasing them to the nonprofits you want to support. The sooner the funds are released, the more a nonprofit can prepare and plan their activities for the coming year.
2. Almost 40% of US nonprofits could be forced to close because of the pandemic.
To say 2020 has been challenging is an understatement. The coronavirus has caused a global pandemic, and economies have become unpredictable. Nonprofits are struggling through the public health crisis and economic downturn, and nearly 40% may be forced to close. Although we would love to believe this difficult chapter will close after December, the reality is that the crisis will likely continue, and the impacts could last for years.
Nonprofits are looking to DAF holders and other donors to give sooner rather than later. The end of the year is a perfect time to release funds because organizations are assessing their capabilities and priorities. Guaranteed funding helps them operate with more certainty.
3. Local, community-led organizations are doing incredible work (and could use your support).
As you’re watching television or streaming online this time of year, you’ll notice advertisements for charitable organizations. Articles recommending nonprofits to support might make it into your feeds. But there are also many trusted nonprofit organizations doing amazing work that don’t have the budget to reach donors through major media platforms.
As a DAF holder, you have access to advisors who can offer guidance on organizations of all sizes working for all kinds of causes. Advisors even have insight into nonprofits doing important work in your community. Giving through your DAF with expert advice gives you a chance to support organizations that may otherwise be overlooked at this time of the year.
Want to give to a GlobalGiving partner through your DAF? Get the details on our planned giving page.
Featured Photo: Education for Impoverished Guatemalan Youth by Common Hope