Millennial Money: Be effective with your generosity in 2020

If you’re fortunate enough to be able to donate money this year, plenty of causes need your attention.

In a year like 2020, choosing where to direct your dollars is like picking your favorite child. Should your money go toward nonprofits providing basic needs, organizations fighting for social justice or a campaign to help local small businesses stay afloat? If you prefer donating your time, how do you give back when volunteer events are limited by the pandemic?

Here’s a guide to prioritizing your donations, taking advantage of special tax deductions for 2020 giving and using your holiday spending to make a difference.

TAX BENEFITS OF GIVING DURING THE PANDEMIC

Dec. 1 is Giving Tuesday, a day earmarked for generosity during the holiday season. This year, in addition to helping those in need, you may be eligible to receive added tax benefits for your donations.

As part of the Coronavirus Aid, Relief and Economic Security Act, taxpayers who take the standard deduction are allowed an additional deduction of up to $300 for charitable donations made in cash. Previously, charitable contributions could only be deducted if taxpayers itemized.

Taxpayers who itemize can deduct up to 100% of their adjusted gross income for cash donations (up from 60%) made in 2020.

These incentives don’t apply to all contributions — only those made to qualifying public organizations, which the IRS defines as “those that are religious, charitable, educational, scientific or literary in purpose.” Contributions to donor-advised funds, nonoperating private foundations and support organizations don’t qualify for the deduction.

The IRS website has a tool to look up tax-exempt organizations.

USE YOUR VALUES TO INFORM YOUR GIVING

Choosing which cause to support is deeply personal. If you...