Despite the economic turmoil of 2020, donations to charities soared, and stimulus checks appear to have played at least a small role in the increase. An estimated 11 to 13 million Americans gave away their stimulus money or planned to do so in 2020, either by donating it to charities or giving it to family members, according to Household Pulse surveys from the U.S. Census Bureau.
“‘This suggests that at least some people were donating their entire stimulus check to charity.’ ”- Giving Tuesday Chief Data Officer Woodrow Rosenbaum
The universal charitable deduction of $ 300 authorized by the CARES Act may also have had an effect. “It is surprising that on December 31 there was a 28% increase in donations of $ 300, which is exactly the maximum amount a donor can take using the universal charitable deduction,” said Jon Biedermann, president of the Fundraising Effectiveness Project. Fund and President and CEO of The Biedermann Group. Taxpayers can take that $ 300 deduction without itemizing this year as well. Some of those who donated their stimulus money to charities last spring told MarketWatch that they felt they couldn’t sit still and take money they didn’t necessarily need while others around them suffered. and put more than 20 million people out of work last spring, lower-income households tended to spend their stimulus checks faster than their higher-income peers. They used the cash for necessities like food and rent, according to researchers at Northwestern University’s Kellogg School of Management. After the second round of stimulus payments, which peaked at $ 600, recipients making less than $ 35,000 a year once again significantly increased spending on groceries and utility bills, according to an analysis of 2.2 million of household expenditures made by data aggregator Envestnet Yodlee.
“Stimulus check recipients earning between $ 35,000 and $ 50,000 increased their spending on charitable giving by 26% after receiving the money. ”
But some households also increased their spending on charitable contributions after receiving those stimulus payments, and they weren’t necessarily the most financially secure. Stimulus check recipients making more than $ 100,000 a year did not see a significant increase in spending on charitable giving after receiving their payments, according to the Envestnet Yodlee analysis. Recipients making between $ 75,000 and $ 100,000 a year increased their charitable donation spending by 16% after receiving their checks. Those making between $ 35,000 and $ 50,000 a year increased their spending on charitable giving by 26%.