A flood of donations to support COVID-19 relief and racial justice efforts, coupled with stock market gains, led Americans to give a record $471 billion to charity in 2020.

The total donated to charity rose 3.8% from the prior year in inflation-adjusted terms, according to the latest annual Giving USA report from the Giving USA Foundation, released in partnership with the Indiana University Lilly Family School of Philanthropy at IUPUI. In contrast, total charitable giving only grew 2.8% in 2019 – a year of economic expansion and stock gains, we have found.

As two of the lead researchers who produced this report, we observed that giving bucked historical trends in three ways. The total increased despite a recession; foundations’ giving surged; and gifts to a variety of nonprofits providing social services, supporting people in need and protecting civil rights grew the most.

1. A good year for giving during a recession

Typically, giving declines or stays flat during recessions. One reason why giving rose in 2020, even though the economy contracted, was that stocks notched gains by the end of the year.

Economists have found that donors give more to charity when the stock market fares well. But stocks usually decline during recessions.

2. Foundations and individuals stepped up

Soon after the COVID-19 pandemic began, many foundations pledged to increase their grantmaking. Based on our findings, it looks like they kept their word: Foundation giving rose 15.6% to a record $88.55 billion in 2020, after adjusting for the effects of inflation.

Strong stocks also bolstered giving by foundations, which support a wide array of charitable activities by making grants. They are required by law to annually give away 5% of the average value of their assets, often held in endowments. As their stocks and other holdings grow, that 5% gets larger too.

As vaccinations trend up and restrictions trend down, a significant number of workers are set to return to the office in coming months. Your extroverted employees are undoubtedly excited. However, their introverted counterparts may not share the same enthusiasm. So, how can you maximize morale and culture to enable the best performance out of both groups?: A thoughtfully-designed hybrid Work-from-Home (WFH) model that prioritizes both the needs of your organization’s employees and processes. Here are some important considerations:

The first critical step in transitioning into a hybrid WFH model is developing and communicating processes that level the playing field for both in-house and remote workers. Set clear expectations about your organization’s internal communications, cyber insurance, bring-your-own-device (BYOD) policy, etc., to ensure that remote workers don’t feel left behind compared to their in-person colleagues.  

While remote work can be an opportunity to cut “traditional” office costs, leverage it as an opportunity to invest in your workforce. Consider using what your organization saves on overhead to provide your employees with a stipend to make working remotely more comfortable. This allows employees to outfit themselves at home with equipment like an ergonomic chair, an extra monitor, noise-canceling headphones, etc. 

At the office, consider re-developing your organization’s layout to better accommodate a hybrid approach: dedicated “open-space” plans for those in and out of the office, private offices for focused work, and spaces specifically designed to encourage collaboration/socialization both face-to-face and virtually. 

The next critical step in transitioning your organization to a hybrid approach is ensuring your infrastructure is capable of handling the needs of employees working in different spaces. Now may be the time to upgrade your organization’s software to the enterprise level so that you can take advantage of security, communication and collaboration features. 

As part of our interactions with nonprofit clients, we consistently hear about topics related to interest rates, credit card acceptance, scams and fraud. Here are a few tips to help you address challenges in these areas.

Many nonprofit organizations, especially in the wake of the pandemic, struggle to have enough funds to fulfill their mission — notwithstanding that the current interest rate environment has drastically reduced the earnings that can become available from their reservoirs of cash. 

We’ve heard nothing to indicate that short-term investment rates will be increasing in the near future. Several issues are keeping interest rates down. First and foremost, interest rates were drastically reduced in March of 2020 in an attempt to support the U.S. economy, during a period we know now as the beginning of the pandemic. And, in the latest jobs creation report from March, employment numbers are improving but not at a rate for the Federal Reserve to begin raising rates despite concerns about some inflation.  

There also is an extreme amount of cash built up within the banking system, brought about by corporations that have conserved cash as a strategy to work through the uncertainties caused by the pandemic. This cash build-up also is caused by less than normal spending among consumers who have been housebound during the past 15 months. 

A combination of the above, along with recently introduced assistance from the federal government, the overall banking system is so flush with deposits that higher interest rates do not need to be paid to attract additional deposits. 

Since we expect this condition to last for at least 12 to 18 months, we recommend that nonprofit organizations not lock funds into long-term certificates of deposit simply to achieve some additionally higher rates. They should also consider asking about the option of tiered money market rates instead of traditional certificates of deposit. Learn more about these options here.

To help with donation cash flow, nonprofit organizations should allow donors to submit funds directly with online payment portals. An online payment portal is a convenient solution that increases revenue, generates material operating efficiencies, expedites transactions, improves customer service and convenience, and powerfully enhances any enterprise payments platform.

Keep Indianapolis Beautiful is looking for volunteers for cleaning projects for the following events: 

VonLehman CPA & Advisory Accelerating Charitable Efforts Act ensures donor-advised funds are made available to working charities in a reasonable time.

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