The ongoing COVID-19 pandemic has stretched US resources and the economy – from the medical shortages at the front lines of the fight to the impact on millions of people’s ability to work and go about everyday life.
It’s becoming evident that government efforts alone — as massive as they are — may not be enough to get much needed support quickly and efficiently to the people who need it most. Fortunately, there are many charities willing to help – through direct response and/or by inspiring smaller donors to follow suit and help out in their communities.
Donor-Advised Funds and Foundations
Jeanne Goussev, LNWM’s Managing Director of Fiduciary Services, says: “This is a time in philanthropy where money needs to move where it is needed. For those who hold donor-advised funds (DAFs) and foundations, consider increasing giving. This is a good time to move funds out of DAFs and into the non-profit sector so that the funds can be put to work in our communities.”
Foundations are required to give at least 5% of their assets each year, but this is a good time to consider increasing that amount. For donor-advised funds, there is no annual minimum required (although some DAFs require that there be a minimum level of transactions).
In addition, Jeanne urges those who can to increase their charitable giving overall. “The impact of COVID-19 is widespread, affecting most every area of charitable work. From health and human services, to the arts and education, our way of life is threatened and resources are needed to support our ability to recover.”
Giving with Care
Carla C. Wigen, LNWM’s Managing Director of Fiduciary Strategy, was recently interviewed by The New York Times on strategic ways to give (How Philanthropists Are Giving During the Crisis). She again emphasized the importance of dispersing funds from Donor Advised Funds, as a quick and effective way to make a difference.
Carla also has this suggestion for those in their 70s: “If you are over 70 1/2 years old, IRA Required Minimum Distribution (RMD) amounts up to $100,000 can be paid directly to qualified charities, thereby reducing ordinary income to the IRA beneficiary. If you don’t need your RMD, this would be a great time to direct it to your favorite charity.”
Finally, Carla is warning our clients and all others to use great caution when giving to unfamiliar charities, as COVID-19 related scams are sadly on the rise.
“Don’t be fooled by false charities during this time. These times of uncertainty are when there are more criminals out there trying to take advantage of people’s generosity.”
For ideas and perspectives on giving, read this call-to-action by Beth McCaw, President and CEO of the Washington Women’s Foundation and one of the Seattle-area donors also interviewed for the New York Times article.
What We Are Doing
As a firm, LNWM is supporting local organizations — see below — that are addressing the impacts of COVID-19. We have set up a gift fund that is matching 2-to-1 employee contributions to these causes, with the potential to increase even further.