If you have ever traveled by air, you have probably heard a wide variety of boarding calls over the airport public-address system. Once you arrived at your departure gate, you probably heard a series of messages giving passengers instructions about the boarding process. As a matter of routine, there are calls for preboarding for disabled passengers and families traveling with small children. Then there are calls for first class passengers, business class passengers and various other levels of priority. All of these calls are made over a sound system that is focused on the general area around that specific gate. Finally, when everyone appears to be on board and it is time to close the door to the plane, there is a “final boarding call” that often rings out across the entire terminal. This “final boarding call” is exactly as the words imply; this is your final opportunity to get on board or you will miss the flight.
In the world of charitable giving, many individuals and nonprofit organizations operate on a calendar year. If you are a calendar year tax filer, I hope you will consider this message as your “final boarding call” for 2020 charitable giving. There is still time to make a contribution that will count for both you and your favorite charity for 2020, but time is quickly running out. The final week of the year in 2020 happens to be a four-day work week, extending from Monday, December 28th through Thursday December 31st. It might be helpful to review a few options that remain for donors during this final call for 2020 charitable giving.
First, it is an important week for many nonprofits due to the amount of charitable giving that takes place at the end of the year, so your favorite local nonprofit is likely to have their office open to accept charitable gifts delivered by hand. Any gift such as cash, checks, donated items, collectibles, tangible personal property or even the rare physical stock certificate is considered to be transferred to the charity when it is placed in their hands. It is important to know whether your favorite charity is operating on limited hours during the final week of the year, because a hand-delivered gift must be physically received by a nonprofit representative by the end of the day on December 31st to count as a gift for 2020.
Next, if you are planning to make a gift of publicly-traded securities, the securities must be transferred into the account of the charity before the end of business on December 31st. Making a gift of publicly traded securities has an important tax advantage over cash gifts because a donor can usually avoid capital gains that may have accumulated since they first acquired the securities. Securities transactions typically take several days to transfer, sell and settle into cash, but the main event that determines the date of the charitable gift is when the charity receives the security into their account, not the receipt of the cash resulting from the sale of the securities. It will be important to initiate a transfer of securities early in the week to make sure it is received by the charity before the markets close early for trading at 2:00 p.m. on Thursday, Dec. 31st. If a charity does not have a securities trading account, more time will be required to convert the securities to cash and deliver the cash to the charity.
Another method to make a last-minute gift is to put a check in the mail and have the envelope postmarked by December 31st. Even if the charity receives the envelope with your gift during the first week of January, the postmark on the envelope will determine the year of the gift. It is not sufficient to date a check on December 31st and mail it in January. The envelope must be postmarked or otherwise date stamped by the carrier (USPS, UPS, FedEx, etc.) during 2020 to count for 2020.
Finally, many organizations accept credit card and electronic check payments through secure online payment processing systems. Transactions through online portals for your favorite charity are usually accessible up to the stroke of midnight. In most cases, you will receive an electronic receipt verifying the date of the gift when your online transaction is complete.
Despite the late hour, it is still not too late to make a gift to your favorite charity for 2020. If you are still uncertain whether your gift will count, reach out to your charity of choice or call our office at ETCF and we’ll try to help. Heeding this final boarding call for 2020 charitable giving may be your next best opportunity to Give Well.