Americans Increased Their Charitable Giving In 2020, Helped By Stimulus Checks And A Stock Market Recovery

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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.

Between 6% and 7.5% of stimulus check recipients gave the money away, according to surveys. Census surveys did not ask people to specify whether they were giving away all or part of their check. As a third round of stimulus payments rolls out, some recipients continue to give the money away. About 4.2 million people, or 5%, of those who had received stimulus checks in the previous seven days said they had given the money to a charity or family organization, according to the most recent survey by the Census Bureau, held between March 3 and 15. Charitable giving increased more than 10% in 2020. Nonprofit leaders initially feared that the economic downturn would prevent people from donating to charities, but the opposite happened. Charitable giving increased 10.6% in 2020 over 2019, according to the 2020 Fourth Quarter Report from the Fundraising Effectiveness Project. Gifts under $ 250 grew the most, increasing 15.3% compared to 2019. The largest gifts ($ 1,000 or more) increased 10.4%. There is evidence that stimulus checks helped drive some of those donations. Giving Tuesday, the annual campaign that encourages people to donate money or time to nonprofits, saw a “measurable increase” in donations of $ 1,200 and $ 2,400 around the time of the first stimulus checks in April. 2020, Chief Data Officer Woodrow Rosenbaum told MarketWatch. The most significant increase was among donations of $ 2,400, he said. “This suggests that at least some people were donating their entire stimulus check to charity at the time,” Rosenbaum said. “The total effect was small, but it may have positively affected donations at other levels.” Giving Tuesday finally raised $ 2.47 billion in the US in 2020, compared to $ 1.97 billion in 2019. Of course, many other factors also contributed to the increase in charitable giving last year. The unprecedented global health calamity and the resulting financial difficulties inspired many to donate to non-profit organizations working to alleviate human suffering. Charitable giving also tends to be related to stock market performance, which has a direct impact on the giving ability of mega donor philanthropists. After a slide in March, the Dow Jones Industrial Average DJIA, + 0.52% ended the year with a gain of 7.3% and the S&P 500 SPX, + 1.18% ended with a gain of 16.3%.

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“‘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.

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“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%.