During this period of suffering and uncertainty, people are exploring ways to help one another, including through charitable giving. The Coronavirus Aid, Relief, and Economic Security Act included two provisions with the potential to incentivize taxpayer giving: a $300 deduction for those who do not take the standard deduction and an increased cap on how much individuals and corporations can deduct in charitable gifts in a year. And today is #GivingTuesdayNow, a global day of unity in response to the coronavirus meant to galvanize a wave of generosity to support communities and nonprofits.
Despite the clear need, policy incentives, and movement for charitable giving, many potential donors struggle to determine how best to help others through giving. Although this is an unprecedented crisis, many well-established approaches and best practices for charitable giving can provide guidance.
If you are in a position to give, here are six questions to consider as you think about which charities to support.
1. Are you concerned about meeting short-term or long-term needs?
With many compelling causes to consider, donors can group organizations into two buckets: those responding to immediate needs and those focused on recovery and creating systemic change.
Funding immediate needs can help ease the suffering of people and organizations waiting for government aid and those unlikely to receive assistance. Supporting organizations building movements or advocating for policy change can lay the groundwork for rebuilding communities and societies.
Some donors might want to support organizations in each bucket or focus on those committed to both relief and recovery.
2. Do you have a geographic focus?
For many, focusing on a meaningful place helps guide giving decisions. That place could be the neighborhood, city, town, or state where you live, grew up, went to school, or studied abroad.
To date, cities have experienced the worst effects of COVID-19, but rural areas face unique challenges that make addressing COVID-19 difficult. We expect to see regional variation in how COVID-19 affects communities across the country and globe in the months to come.
Donors might also want to consider regional funding inequities. Areas with high concentrations of wealth might have a lot of institutional and individual funders, but other cities and rural areas might not. Areas with fewer philanthropic resources might disproportionately benefit from individual donations.
3. How much control do you want over how your gift is spent?
Consider the extent to which your donation will empower the people it aims to reach.
The Chronicle of Philanthropy reported several big foundations and donors that typically spend years developing grantmaking strategies have recently supported COVID-19 funds set up for direct cash transfers to people in need. Though not a new phenomenon, giving no-strings-attached cash empowers recipients to decide how best to spend the money.
The same reasoning applies to donors who make unrestricted gifts to nonprofit organizations, which allow organizations to determine how best to spend the money rather than earmarking it for a specific program.
4. Do you want your donation to factor in equity and the effects of structural racism?
An equity lens can be a useful frame for charitable giving decisions. Data reveal that not everyone is experiencing the same health and economic toll during the crisis.
Here in Washington, DC, black residents make up about half of the city’s population but, as of May 4, a staggering 80 percent of total deaths. Those concerned about equity might want to support organizations serving those disproportionately affected by structural racism.
These donors should also consider how the same structural issues play out in the supply chain of charitable giving. Think about the people creating, managing, and providing goods and services who also benefit from your donation. At a time of great economic uncertainty, your donation helps enable an organization to maintain payroll and benefits.
This might inspire those concerned about racial and economic justice to factor in the equity trade-offs when donating to large, name-brand organizations that primarily employ white people instead of smaller, community-based organizations and those that employ people of color or other populations disproportionately affected by the crisis.
A new study by Echoing Green and Bridgespan reveals that black- and Latino-led nonprofit organizations whose leaders placed as finalists and semifinalists in Echoing Green’s prestigious fellowship raised less funds than their white peers. Donors concerned about this inequity could seek out minority-led organizations to support.
5. Are you interested in letting the expertise and judgment of others guide your charitable giving?
To benefit from the expertise of an organization or institution that has studied the charitable landscape, donate to an intermediary that has curated a pool of worthwhile organizations to support. This could be a community foundation, United Way, or an online giving platform.
To benefit from the expertise of people with lived or professional experience, start or join a giving circle and make funding decisions alongside the group.
Several charity rating platforms have introduced features to help donors understand an organization’s impact, not just its administrative expenses. Although overhead is easy to measure, the consensus in the philanthropic sector is that it’s not reflective of whether organizations are achieving the best outcomes and should not be a major driver of giving decisions.
6. Do you want to expand your definition of doing good to include commercial activities?
Because the almost 90 percent of taxpayers who take the standard deduction have no need to itemize charitable deductions, think about how all your spending might benefit people in need.
This could look like a contribution to a fund supporting furloughed workers, buying a gift certificate to a favorite restaurant that hopes to hire back staff, generously tipping delivery workers, ordering books from a bookstore struggling to stay in business, or continuing to pay house cleaners and child care providers even when you aren’t using their services.
During a time of widespread suffering, spending money—period—will benefit others. And you can make those purchases even more meaningful by applying an equity lens to ensure the owners and workers of businesses you support are those disproportionately affected by the crisis.
A recent Cause & Social Influence COVID-19 survey shows young Americans list supporting local business as the best way they have supported others in the past three weeks. Making a charitable donation ranked seventh in the list of activities.
There isn’t one right way to give
These philanthropic approaches and practices can help you prioritize organizations to support, but there is no one right way to give. What works for one person might not work for another.
And as you think about giving during the pandemic, don’t forget about the charities you typically support. Nonprofit Finance Fund’s State of the Sector 2018 survey shows 60 percent of nonprofit organizations have less than three months of operating reserves on hand. The charities that routinely receive your support are likely struggling now too and will appreciate your continued support to weather the pandemic.