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How to donate your $600 stimulus check to people in need

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Over the weekend, Congress reached a deal for a new $900 billion Covid-19 relief package, which includes funding for stimulus payments of up to $600. 

The latest pandemic rescue legislation provides a direct payment worth up to $600 to individuals earning up to $75,000 and $1,200 for couples earning up to $150,000. Those who earned more than those thresholds will receive smaller payments.

While this money will be a lifeline for many Americans struggling financially amid the pandemic, not everyone who's eligible for stimulus checks is in dire need for extra cash. Savings account balances, for example, grew an average of 65%, or $1,553, during the pandemic. As of August, nearly 60% of Americans had saved enough to cover at least three months of living expenses, according to the Financial Health Network's U.S. Financial Health Pulse 2020 Trends Report.

If you're doing OK financially during the pandemic, or even better, you have extra money in your budget right now, you might want to consider donating some or all of your stimulus check. And you wouldn't be alone in opting to donate. There's been over $11.9 billion donated globally to Covid-19-related causes during the first half of 2020, according to an August report by Candid and the Center for Disaster Philanthropy, which tracks global philanthropic activity. 

Finding the right way to give back

How do you find the right way to donate? If you're looking to donate locally, consider the fact that some in your community, including immigrants, may not qualify for stimulus payments. To help these folks, you might want to give to community groups, food pantries and organizations helping your neighbors who are in need. Many times, you can find these fundraising efforts by running a Google search of your area. 

While there are dozens of worthy organizations that focus on specific cities and regions, including as City Harvest in New York and Martha's Table in Washington D.C, you can also give to nonprofits that are working to provide relief on a national and international scale. 

Finding a nonprofit that's focused on a cause you care about may require some research. Of the money raised globally for nonprofits related to health care and Covid-19, for example, only 5% of donations were designated for Black, Indigenous and people of color, according to Candid's report

That's despite these populations being disproportionately affected by the pandemic. If that's an important aspect for you, look at where different organizations are putting their resources. You might want to give to nonprofits that focus on civil rights and community building, such as the Southern Poverty Law Center and PowerPlay NYC

You can also maximize the impact of your dollars by choosing organizations that keep administrative costs low. CharityWatch recommends finding nonprofits where 60% or more of every donation goes toward an organization's programs and services. You can use websites such as Charity Navigator, CharityWatch, BBB Wise Giving Alliance and Great Nonprofits to look up charities, their financial history and how donations are spent. Plus, you can also check out CNBC Make It's list of nonprofits and charities that are taking donations for coronavirus relief. 

Don't forget to look into any potential matching programs you may have access to. Many large employers offer to match employee donations to nonprofits, says Michael Hennessy, a CFP with Florida-based Harbor Crest Wealth Advisors. This is a quick way to multiply the impact of your donation. You can check your workplace intranet page or speak with HR to find out if your employer offers a program. "That one additional step would have a huge impact on the causes you hold dear," Hennessy says.

And this year, donating to a nonprofit may actually net you a tax break. The Coronavirus Aid, Relief, and Economic Security (CARES) Act is allowing Americans to deduct up to $300 from their 2020 taxes for charitable contributions (bumped up to $600 for couples filing jointly in the latest relief package). The stimulus package stipulated this was an above-the-line deduction, which means you don't have to itemize to claim the deduction, so more Americans can take advantage.

Whether it's donating to causes that are related to the pandemic or giving to just one that's focused on broader issues such as the environment or social justice, it's all about finding the right place. And that's different for everyone, says Eric Roberge, a certified financial planner and founder of Boston-based wealth management firm Beyond Your Hammock.

"Find that cause where you can make the most impact, whether that's giving some money directly to another individual or it's going through a nonprofit or it's donating to a business directly because you have some connection to them," Roberge says.

Check out: Nearly 3 out of 4 millennials have donated money during the pandemic

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