How the Pandemic Changed Charitable Giving

An elderly gentleman friend of mine is a faithful churchgoer. I happened to run into him recently (not literally of course, we were both out walking and wearing our face masks). He mentioned that he was feeling a bit guilty because he was not placing an offering in the basket at church each week. In fact, he hadn’t attended church since before Easter due to the coronavirus pandemic. 

I mentioned that his church may have an online platform to receive donations. He replied that he not only didn’t know whether it did — he didn’t even know whether his church had a website! “Let’s see,” I said, taking my cellphone from my pocket. His church did have a website, and did take donations online. 

“Oh my,” he continued. “I’ll have to have my grandson come over and help me make my usual donation. I might not be going to church, but the work of the church continues even with this virus. In fact, they may need my stewardship now more than ever!” 

We parted ways, but it left me thinking. What about our church families who may have lost their jobs, or have had extra medical expenses? Who is helping them? How many individuals and families quit giving because they quit going? Who is making the excuse that giving online is too difficult or not safe? 

What I found was heartening. It says a lot about Americans that, according to a study by Fidelity Charitable, most donors are maintaining — or even increasing — charitable giving during Covid.

According to the survey:

  • Volunteer hours decreased as people were urged to to stay home.
  • Most donors are worried about nonprofits’ ability to operate during these times.
  • Donors are likely to continue giving, especially to the same organizations.

The same study mentions that Donor-Advised Fund donors are taking COVID-19 into account in their giving, and most are staying the course and trusting their fund managers to make good choices during this pandemic period.

We find that people long for ways to connect with others during the pandemic. It’s a human motivation that is serving our national interests while making us feel better about ourselves. God “is the same yesterday, today, and tomorrow” [Heb 13:8] and His work is never-ending. And it seems that both donors and DAF managers are walking in His footsteps.

The WOKE Investor

You are likely familiar with the terms “impact investing,” “cause based investing,” “social impact investing,” “socially responsible investing,” and “sustainability investing.” In fact, one of these terms serves as the backbone of the Stewardship Foundation. Nowadays, there’s a new kid on the block — the woke investor.

The Woke investor likes ESG funds for an investment strategy that aligns with personal values, whether those be going green, saving the planet, or protesting for BLM. They want to feel good about improving their financial well-being. 

Woke investors are generally millennials who want their money to go towards making a difference in society and in the world (though, when asked how their money would actually support a good cause, most aren’t sure). 

The Stewardship Foundation is similar in its pursuit of transformational investing, though where we invest may very well be different. We were founded on a set of core beliefs that allow our clients to trust that the decisions we make to grow and protect their wealth are made as though Christ was looking over our shoulder. 

Some investment companies appear to be exchanging the goal of maximizing shareholder value for maximizing societal value, a kind of social justice (source: The Federalist). Does this mean that SF has been way ahead of the curve? Perhaps. Since 2009, we have served only clients who share our Credo.

We faithfully serve clients who also believe…

  • in transformational giving.
  • that giving is a collaborative act between the donor, the charity, and their God.
  • that transformational giving is not about the bottom line, but about the heart.
  • that transformational giving creates partnerships that impact entire communities.
  • in the sanctity of human life, marriage and sexual morality, and religious freedom and the rights of conscience.
  • that it is our responsibility to care for the poor, the sick and the disadvantaged, and to use our talents for the betterment of mankind through education, opportunity and freedom.

Our clients are not WOKE investors. They were never asleep.

Top 4 Charitable Giving Strategies

If your charitable giving is limited to cash donations to organizations and causes you love, you may want to take a more strategic approach. Who wouldn’t want to pay less in taxes while at the same time making your charitable giving go further and do more than you ever dreamed!

The TOP 4 Charitable Giving Strategies

#1 Beneficiary Designations

Donors can designate a charitable organization as a beneficiary of their will, retirement plan, individual retirement account (IRA), life insurance policy, annuity, or any other asset that passes by contract, such as a payable on death account. The charity can be the primary beneficiary or one of several beneficiaries. Accounts with named beneficiaries are generally not subject to probate; however, designating a charitable beneficiary under a will is subject to probate. Distributions of retirement assets that would be subject to income tax, such as from a traditional IRA, are also exempt from income tax when passing to a charitable organization.

#2 Charitable Remainder Trust

If you want to make a future gift while retaining the right to income from the assets during your lifetime, you could consider a Charitable Remainder Trust. This is an irrevocable trust funded with either cash or property. You retain the right to an income stream that is either a fixed amount or a fixed percentage, such as with a Charitable Remainder Annuity Trust (CRAT) or Charitable Remainder Unitrust (CRUT). Income is paid for a number of years or for the life of the income beneficiary. When the trust ends, the assets pass to the charitable entity. You may be entitled to a tax deduction when you transfer assets to the trust. Also, by donating highly appreciated property to the trust rather than selling it and donating cash, you avoid incurring capital gain tax on the sale of the property since the trust, not you, owns the property. Keep in mind that such a trust is irrevocable, so you cannot terminate it or change the terms (other than retaining a power to change charitable beneficiaries). Also, the assets in the trust will not be available for your heirs.

#3 Charitable Lead Trust

Like the CRAT or CRUT, the Charitable Lead Trust makes periodic payments for a term of years or for life, but the payments go to a charitable entity rather than to the donor or another individual. When the trust ends, the remaining assets return to you or pass to other noncharitable beneficiaries, such as your children. Depending on how the trust is structured, you may be entitled to an income tax charitable deduction when assets are transferred to the trust.

#4 Donor-Advised Fund

If you would like to make multiple gifts but are tired of the paperwork, consider creating a donor advised fund. This is a charitable fund managed by a community foundation or a charitable entity created by a bank or other organization.

Contributions to a Donor-Advised Fund are tax deductible; however, assets transferred to the fund do not need to be immediately distributed to a charity. You may retain the ability to make recommendations for distributions to charitable beneficiaries; helpful if you want to take a charitable deduction but are not yet sure which charities you want to support.

These charitable giving methods may allow you or your heirs to benefit from your assets while providing needed funds to charity during your lifetime. If any of these options interest you, contact us now info@stewardshipworks.org to see if which of these planned gift strategies can benefit your overall estate plan.