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How the New $300 ‘Universal’ Deduction Works

In March of this year, Congress enacted the Coronavirus Aid Relief and Economic Security Act, otherwise known as the CARES Act, which included a new provision for charitable deductions. How does this “Universal’ deduction work and how can this benefit your fundraising efforts for this year?

The CARES Act includes a modest, one-time-only, “above the line” deduction for the average donor.

· Modest means $300.

· One-time-only means this may only be claimed when you file your 2020 income taxes with the IRS.

· Above the line means you can subtract it from your gross income, thus reducing your taxable income.

There are some pros, cons, and confusions about this modest deduction.


· It is something. Nonprofit organizations have been advocating Congress for years to raise the charitable deduction rate.

· You don’t have to itemize your donations in order to claim this deduction.


· This $300 charitable deduction for 2020 is projected to increase charitable giving by $110 million or only 0.03% more than what was originally projected.

· This deduction only applies to gifts of cash. Gifts of securities, real estate, or in-kind may not be included as part of this $300 deduction.


· There are still several proposals pending in Congress.

· Congress did not specifically state that this deduction will end December 2020.

Most likely, there will be more about this and other economic relief legislation in the months to come. As fundraising leaders in our communities, it is our responsibility to be vigilant in the care of our organization and donor’s best interests. There are many resources available online such as the Chronicle of Philanthropy and


Michelle Crim, CFRE

Dynamic Development Strategies can help. We offer coaching and fundraising services for our nonprofit clients. We specialize in startup and smaller nonprofits because we understand your challenges. Please contact us for more information.

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