The ball is about to drop on 2022, and many people are thinking about ways to maximize both tax deductions and the impact of their donation dollars.
“We are still coming into a sort of post-COVID reality for the nonprofit communities and people are thinking about how we can support them, but a lot has changed in people’s financial lives with inflation and uncertainty in the stock market. Whenever there is economic instability, people exhibit more caution in giving. And after the past few years, people are also thinking more about what is really important to them and what they will do with their philanthropic dollars,” said Jenny Flynn, president and CEO of the Community Foundation for Southern Arizona.
The tapering of COVID-19 relief funds to nonprofits and changes in tax laws over the last several years to raise standard deductions have also impacted charitable organizations, according to Flynn. She said that fewer people are itemizing taxes and some are choosing to make one larger charitable gift in a year in lieu of smaller gifts for two consecutive years to reach the threshold for itemization.
Ultimately, many nonprofits are feeling the economic instability that donors experience.
In recognition of the trend indicating donors want to direct contributions specifically to causes they value, the Community Foundation for Southern Arizona has developed nine specific Field of Interest Impact Funds. The funds address Animal Welfare; Arts & Culture; Children & Youth; Education & Workforce Development; Environmental Sustainability; Greatest Need; Healthy Communities; Housing; and Inclusion, Diversity, Equity & Access.
Flynn said the funds offer a simple and effective way for people to participate in collective impact funding in the areas they care about most. The funds pool donor dollars and then provide grants to local nonprofits that support the specific causes.
“You might have a donor who is interested in supporting work for animals and another who is passionate about housing. You might have a 16-year-old who can give $16 or a 60-year-old who can give $60,000. With these funds, the gifts are combined so individuals each have stakes as donors. Many donors see this as a great way to pool resources and allow their dollars to have a bigger impact,” said Flynn.
Recently, the Environmental Sustainability fund distributed $630,000 in grants to seven local organizations through a Nonprofit Solar Project. The project, which partnered with Tucson Electric Power and the Tucson Foundations, offers nonprofits the opportunity to meet a significant portion of their energy needs through solar power. The intent is to enable nonprofits to reduce carbon footprints and energy costs, freeing up resources for programming. Grantees include BICAS, Coyote Task Force, The Drawing School, The Edge School, Emerge Center Against Domestic Violence, Sonoran Glass School and Youth On Their Own.
Prospective donors can learn more and make online donations to Impact Funds at cfsaz.org/impact/.
Flynn also encourages Arizona taxpayers to consider taking advantage of state-specific tax credits such as the Public School tax credit ($200 for individual filers and $400 for married couples filing jointly); the Qualifying Charitable Organization tax credit ($400 for individuals and $800 for married couples filing jointly); and the Qualifying Foster Charitable Organization tax credit ($500 for individuals and $1,000 for married couples filing jointly). Check with your tax care provider to see if you qualify.
“This is a way of contributing to something you care about through your taxes. It adds a little more personal value to paying taxes since you know it will make a good difference in community,” said Flynn.
The tax credits are more vital than ever for many nonprofits, particularly since economic circumstances have created greater need, according to Michele Wright, co-founder of Spreading Threads Clothing Bank, which is one of less than 10 local Qualifying Foster Charitable Organizations.
“We couldn’t survive without it. We are a small, grassroots organization and even though we have been doing this for 13 years, we don’t have the revenue and infrastructure of some of the larger nonprofits,” said Wright.
Spreading Threads, which is run by current and former foster parents, provides gently used and new clothing, books, toys and other items to foster, foster/adoptive, and kinship families in Southern Arizona. It serves 400 kids in the foster system each month Wright said that current need for assistance is equal or greater than any she has seen.
“We are helping grandparents and great-grandparents who are caring for children and living in hotels because they can’t get apartments. We are hearing from families who are really hurting. With food and rent so high, they run out of money after paying for those and have nothing left for clothing and shoes. We are able to fill that gap; it is more expensive for us, but hopefully we can get it done,” said Wright.
Wright said the increased price of basic items — she insists on new shoes, underwear and socks for children when they enter foster or kinship care — has resulted in higher expenses for the nonprofit.
Additionally, in May the organization purchased a 5,000-square-foot building at 2945 N. Flowing Wells Ave. Wright is excited about the much-needed space and hopes to be able to install air conditioning this year.
“We chose the location because it is the highest removal ZIP code in Tucson for Arizona Department of Child Safety. We wanted to be where people need us the most,” she said.
BILINGUAL VIDEO: Ballet Folklórico Tapatío is a local non-profit dance group, and this year was their third participation in the parade. The theme of their float was Fiesta en México, and they danced to traditional songs from Jalisco, wearing typical costumes from that state. With the help of the dancers' parents, they prepared the float and the costumes full of lights for everybody to enjoy the event.
