Giving Tuesday & Charitable Gifting
Whether it’s due to the holiday spirit or taking advantage of tax deductions before it’s too late, one-third of annual charitable donations are made in December.1 Just as you try to be a mindful shopper who avoids impulse purchases, it’s important to be a careful giver who thoughtfully evaluates emotion-tugging appeals. The following tips can help.
Plan ahead. You can’t buy gifts for every friend and relative, and you can’t donate to every worthy cause. So consider what areas you’re most passionate about. And don’t be like two-thirds of donors, who don’t do any research before giving.2 Examine prospective charities and choose groups who address your concerns most effectively and efficiently. Check out large organizations on charity rating sites like GuideStar.org, CharityNavigator.org, or the Better Business Bureau Wise Giving Alliance site, Give.org. Evaluate smaller, local nonprofits by reading their annual report, audited financial statement, and IRS Form 990. Look for entities that spend 75 percent of their budgets directly on programs. You might even volunteer and observe their programming in action.
Concentrate support. After you’ve identified charities with reputations for performing well, narrow your choices. Although diversification works well when investing in stocks, it’s less effective when investing in charities. Giving more to fewer organizations allows them to spend less on fundraising, keep operating costs low, and plan strategically.
Budget for giving. Once you’ve chosen your favorite nonprofits, decide how much you want to give and make room in your budget. See if you can make your gifts go farther by participating in a matching program through your employer or a generous donor.
Be tax smart. You can’t deduct donations unless you itemize your tax return and give to a 501(c)3 tax-exempt entity. (To check whether a charity qualifies, visit the IRS webpage, apps.irs.gov/app/eos). If you receive something in return for your gift (e.g., a dinner or a book), its value must be subtracted from your donation. A cancelled check or credit card statement is adequate proof for gifts under $250, but you’ll need a receipt for gifts above that.
For more information on targeting your charitable efforts, give our office a call. We can also work with your tax advisor to help you and your causes get the most benefit from your gifts.
We do not provide tax advice; coordinate with your tax advisor regarding your specific situation.
1,2 https://neonone.com/resources/blog/year-end-giving-statistics/