This content is provided by Clark A. Kendall of聽聽in Rockville, MD.
The year of 2020 will go down in history as one of the most trying periods of time for scores of Americans who lost their jobs or lost family members to the coronavirus.
With the pandemic ravaging families, individuals, paychecks and the entire U.S. economy, the gap between the 鈥渉aves鈥� and 鈥渉ave-nots鈥� has been growing wider.
“No other recession in modern history has so pummeled society鈥檚 most vulnerable,” the Washington Post reported, as it investigated job loss data from the U.S. Labor Department and found that the economic collapse caused by the pandemic has led to the
According to the Post, the recession created a mild setback for those at the top of the economy and a depression-like era for those at the bottom.
“White women, for example, have recovered 61 percent of the jobs they lost 鈥� the most of any demographic group 鈥� while Black women have recovered only 34 percent,” according to the Post.
Racial inequities such as those have been made even more evident through Black Lives Matter rallies and other social justice protests that have swept across communities nationwide, sometimes leading to violence in the streets and damage to local businesses.
“Multiple crises are all happening at once,” said Clark Kendall, President and CEO Kendall Capital, an investment management firm in Montgomery County, Maryland.
Additionally, experts say the economic recovery from the pandemic may be more of a 鈥淜鈥� shape than a 鈥淰鈥� shape.
While a 鈥淰鈥� recovery would lift most of the country back up, a 鈥淜鈥� recovery would mirror the shape of that letter with one side of the economy heading upward and the other downward.
Stocks rebounded following a huge selloff earlier this year, but most Americans didn鈥檛 feel that boost.
鈥淎s of the first quarter of 2020, the wealthiest 10% of American households owned 87% of all stocks and mutual funds,
So, what is the best way to help those in need right now?
found that 56% of U.S. households participated in charitable giving during the first half of 2020, with one-third of households giving money directly to charitable organizations, individuals or businesses.
Writing a check is usually the most popular thing to do, but according to Kendall, “a check is not the most efficient way to maximize your gift.”
One innovative alternative Kendall recommended was to set up a donor-advised fund (DAF) which allows donors to create an account and contribute cash, securities or appreciated assets.
Donors receive an immediate tax deduction and can arrange for grants to be distributed through the fund over time.
“Donors can contribute to the fund as frequently as they like and then recommend grants to their favorite charities whenever makes sense for them,” according to
DAFs can be set up and managed through trusted organizations such as the and .
“Those groups do a great job of helping clients give appreciated securities and connecting them with charitable organizations,” Kendall said.
Another unique option for people seeking to donate money involves a qualified charitable distribution (QCD), which is a withdrawal from an individual retirement arrangement (IRA) that’s made directly to an eligible charity.
“People could be giving up to $100,000 a year from a retirement account,” said Kendall.
Donors who give money through QCDs can also save tax dollars in several ways.
The strategy is especially helpful for individuals who are over 70陆 years of age and forced to take taxable required minimum distributions (RMDs) from their IRAs.
鈥淚 share with clients of our firm and the giver community that DAFs and QCDs are wonderful tools to stretch your giving dollars to allow you to have a greater impact in our community and for the benefit of the charities that are in need and you care about most,鈥� said Kendall.
But money isn’t everything.
Kendall said, during the pandemic, it is hugely beneficial for people to simply donate their time and talent to organizations that work directly with members of the community who need some assistance.
Organizations that provide those services include the and, in particular, which has the largest donor and volunteer supported mentoring network in the Washington, D.C. region.
“Many people are Monday morning armchair quarterbacks telling others what should or shouldn’t be done to solve the world鈥檚 problems,” said Kendall. “The people I admire most are those who are givers of their time, talent and resources to make the world a better place for others.”
