Read these 29 Philanthropy Tips tips to make your life smarter, better, faster and wiser. Each tip is approved by our Editors and created by expert writers so great we call them Gurus. LifeTips is the place to go when you need to know about Charity tips and hundreds of other topics.
Unfortunately, many charity scams focus on events or subjects that pull at your heart strings, such as disasters, issues of patriotism, children, animals or other vulnerable groups. If you are not familiar with the organization or the cause, or if the appeal seems overtly emotional or uses statistics that seem unreal to you, take the time to get more information. Do some research on the cause, and ask the organization for documentation.
In many cases, these appeals will be legitimate and you will choose to make the donation and help the cause. In other cases, you may find that the appeal was not legitimate, and you can focus your energies on finding an organization that will help the cause. At the very least, be skeptical of extremely emotional appeals just so that you are sure that you are making a clear choice to give; no charity should be the result of emotional trickery!
If you receive a solicitation from a third party, such as a volunteer or a professional fundraiser who says he or she is calling on behalf of an organization, call the charity to find out if it is aware of the solicitation and has authorized the use of its name.
If a telemarketer claims that the charity will support local organizations, call the local groups to verify. If the answer to either of these questions is "no," this should raise a red flag.
It's better to be safe than sorry, and you will need documentation for tax purposes. Ask for the organizations to which you donate for a receipt showing the amount of the contribution and stating that it is tax deductible.
If you received any principal in return for your donation, or if you donated material goods, make sure that the amount that is tax deductible is also provided on the receipt.
Donating to charity is not just for the lucky segment of the population with enough money that they have a financial incentive to give it away. Every penny that you give makes a difference to the organization to which you give it. Nevertheless, you might wish you could give a larger gift than you can afford to your charity of choice. Guess what—others may be in exactly the same situation!
Consider organizing a giving group: each member of the group gives what he or she can comfortably give. Total up the funds, and then, as a group, decide which charity or charities you would like to donate the amount. This arrangement could take other forms, too: you could decide you want to organize a group of people interested in giving to a specific organization, and then collect and total the gifts.
Whether you do it at the start of the year or the start of the month, you probably lay out a budget from time to time. As you put aside money for home improvements, vacations, and the unexpected car repair, also include line items for your philanthropic activities. If you know that you give money to your alma mater each year, put that in the budget. If you have a cause that is close to your heart, add that, too.
If you're not sure to which charity you might want to give, or you know that each year brings its share of sad events that require financial relief, just set aside a dollar amount so that you have some cash to send when the time arises.
In the world of business, it is increasingly more challenging to do business in the community and not be a part of it. Good corporate citizenship includes giving business-sponsored donations. Corporate philanthropy helps companies increase their corporate profile and community goodwill, and corporations also benefit from the reinforcement of the common good that philanthropy fosters.
Funding from corporations is often in the form of larger gifts or grants, and can make a significant and positive impact on nonprofits' ability to advance their mission effectively. While many companies have a group dedicated to deciding to which causes to give, and how much, employees also have the opportunity to recommend charitable causes. Urge your company to get involved!
We know it's a good thing to do. We know that there are thousands of worthy causes out there that would really benefit from our gifts. But it's okay to not be able to give to every charity, or to say no sometimes.
Give generously when you can, but if you simply cannot afford to give at a certain time, or if you feel uncomfortable, don't be afraid to say no. If you are put on the spot by a solicitor, feel free to ask for more information and take more time to think before making your decision.
As tempting as it might be to put a $20 bill in the envelope you receive with a solicitation letter, take the time to write a check. Cash gifts are easily lost or stolen and not traceable.
*For security and tax record purposes, it is best to pay by check made payable to the beneficiary. Never make a check payable to a solicitor.
As with anything, there is more to charitable giving and tax deductions than meets the eye. Find out how much of your donation is really tax deductible. Be aware that if you receive a something in exchange for your gift (such as a book, a dinner, or some other 'prize') the amount of your tax deduction is reduced by the fair market value of the premium. For example, if you pay $600 for 2 tickets to the Superbowl (assume face value of $200 each) at a charity auction, you can only receive a tax deduction equal to $200.
*You can always turn down the incentive item if you wish to claim a deduction for the full amount of your gift - ask the receiving organization for more details.
It's not all about writing a check. There can be significant benefits to using alternative forms of giving, such as planned giving (bequests), charitable trusts, gifts in kind, endowments and other creative gift mechanisms.
*Your tax advisor, accountant or attorney can help you make the best plan for you and your family.
Philanthropy involves the donation or granting of money to various worthy charitable causes. It is seen as a way to directly effect change in society independent of government bureaucracy or involvement.
*Philanthropy is a major source of income for artistic, musical, religious, and humanitarian causes.
After a certain age, children are naturally generous. It is important to nurture this impulse, as it will be the foundation for a lifetime of generosity. Include your children in your donation process, talking with them about the different causes and why it is important to support those causes.
Children notice a lot of the things about the world around them. Ask them who they would like to help and why, and encourage them to consider sharing a portion of their allowance to help those causes. Bring your children to fundraising events—many walks, runs and rides offer children's equivalents, giving them an opportunity to experience a different component of charitable giving.
*Supporting your children's charitable education will not only help lead to a lifetime of caring, giving and happiness, it is a special way for you to bond with your children.
When considering making a donation, particularly a large one, or one of any size that will put a strain on your own finances, be sure to discuss the donation with a trusted family member or friend, or with a financial advisor, before committing the funds.
Some sophisticated but underhanded organizations can really have their acts together, and an objective perspective can be valuable in identifying the flaws in their pitch.
It may seem obvious, but if you have any questions about the legitimacy of the organization from which you have received a solicitation, or if you are just not sure yet whether you want to give to a cause, or how much to donate, do not provide any credit card or bank account information to the organization.
Once you have reviewed all information from a charity and have made the decision to donate, then work with the organization to get them the money.
There are almost innumerable worthy charitable causes out there and you probably want to help a good number of them. For reasons of both time and money, however, you may find that you need to narrow down the organizations that you regularly support. You may have already identified your subset, but if you are still evolving your giving strategy, it is a good time to try on various charities for size.
Joining and/or supporting multiple organizations at a lower level for a year or two will give you the opportunity to interact with the organization, receive its newsletters and annual reports, and generally get a sense of how you and the charity get along. When you find the groups that both promote the causes you support and do so in a way that is comfortable for you, you can feel better about committing more of your time, money and advocacy to those causes.
Many nonprofit organizations are very politically active, promoting legislation that advances and supports their mission. Such organizations use their membership numbers to advocate for their cause and your involvement can help them build their membership base and lobbying power.
If you don't have a huge charitable budget, but you know that you support the mission of one or several organizations, consider becoming a member of those organizations at their lowest level. In most cases, for between $25 and $30 a year, you can pump up their membership numbers, receive information about their efforts, and learn more about the organization. Over time, you might be able to afford a higher level of involvement, and you will have a history and track record on which to base your support.
To receive tax benefits when you make a donation, you must keep appropriate documentation. For monetary gifts of less than $250, a cashed check or receipt from the charitable organization is usually sufficient proof of contribution.
When donating property, establishing a trust or an annuity, it's time to call in professional advice—talk to your accountant. Also, many charitable organizations will provide you with support for whatever documentation you need for tax purposes.
You know the drill: the phone rings and it's your alma mater…or the fire department…or the organization that benefited when you sponsored your friend in the marathon last year. The person on the other end of the line wants to know what you'd like to donate this year. It's probably dinner time, but don't hang up just yet - that's a volunteer on the other end of the line, or at least an employee who has dedicated her career to nonprofit work. However, do not be afraid to ask questions!
Ask solicitors names and her relationships with the organization; if you are not familiar with the organization, ask what its mission is and how your donation will be used. Make your donation only when you feel comfortable that your dollars will be supporting an organization you know, believe in and trust.
If your company does not have an established philanthropy division, worry not! Giving as a corporation is not so terribly different than giving as an individual. First, as you would from a personal perspective, find out who you could give to and the ways of doing so. To narrow down your choices, consider selecting a specific sector to which to donate. You might want to think about what your business does and where it is, and select charities whose mission is in line with your own goals. If your company makes any kind of detrimental impact on the community of which you are a part, you might consider donating to a charity whose efforts remedy such an impact. For example, if you have a lot of waste or environmental impact, you might want to give to an environmental charity.
If your company has skills or expertise that could be valuable to members of the local community, you could consider setting up an internship program for local kids. As a corporation, you might have surplus materials or supplies that you could donate to local charities or schools; or, you might want to designate a cash donation to be used to buy such capital improvements on the behalf of a charity. Your organization can also set up a gift-matching program, or something similar, so that your employees are encouraged to give to charities that they support, and your corporate exposure to a range of organizations increases.
*Think creatively, and develop a suite of giving opportunities. Your active involvement will help you build a mutually-beneficial relationship with the organizations and individuals in your community.
Nonprofit organizations tend to have annual fundraising campaigns, punctuated every so often with specific fundraising events that raise money for particular causes or purposes. When you give to an annual fund, you are supporting the general operations and activities of a charity. Ask questions about how the money will be used, and what percentage of it will go to salaries, mortgages, and the like, and how much is directed to programs. Depending on the answer, and depending on what you are most interested in funding, you can talk with the charity about earmarking your gift for specific purposes.
Let's say you want to donate money to go to hurricane relief in Florida, designate that on the check, and send a letter with your donation. Such designations can be attached to material donations. For example, if you have more books than you can store, donating them to a library can be a great option. Depending on the library's needs, they might sell those books to raise money with which to buy new books. If you still want to be able to go and read "your" books, however, you can probably talk with the library about designating those books to be retained.
*When making a designated donation like this, it makes a lot of sense to do some legwork and talk with the charity to which you want to donate first. That way, you'll know the best way for you to help.
Maybe you're shy, maybe you don't want to end up in a mailing list database, or maybe you have reasons for not wanting to receive any acknowledgment of your gift. Good news: your gift can be confidential.
If you prefer to have your gift remain confidential, you should let the organization know. Charitable organizations value all the donations they receive and will do their utmost to honor your wishes.
Aristotle said, "Giving away money is easy. Deciding whom to give it, how much, when and how, is not." Choosing among the many worthy causes can be a challenge and, unfortunately, the choice is made all the more difficult by organizations that are not necessarily on the up-and-up.
Sadly, there are many charity scams out there, to such a degree that the Federal Trade Commission (FTC) advises citizens to undertake due diligence and get as many facts as possible before donating. This research will help ensure that your donation dollars benefit the people and organizations you want to help, and doing such research is a good practice whether you are contacted by an organization's employees, volunteers or professional fund-raisers, and whether the solicitation for donations comes by phone, mail, the Internet or in person.
Like individuals, corporate donors can receive deductions and tax credits for their charitable donations. In other words, even though the point of giving isn't to receive something in return, your company will (if that fuels the giving fire).
Consult your finance or accounting office for more information, and be sure to get documentation for all donations that you make.
Want to make your donation double? Ask your employer whether they will match gifts.
Many employers match gifts made by their employees or will make grants to organizations recommended by employees. This is an easy way to direct more funds to the charities of your choice.
Some questionable charities use an impressive name which closely resembles the name of a respected, legitimate organization. When you receive a solicitation from an organization that sounds familiar but that you don't know well or with which you do not have an existing relationship, ask for information on the organization in writing.
Check out the charity with the Federal Trade Commission, charity ratings providers such as CharityWatch, Charity Navigator or GuideStar, and/or your state charity registration office before making a contribution. You might also want to check IRS publication 78 to confirm that the organization is eligible to receive tax-deductible contributions.
For many people, income can vary from year to year. Tax rates fall and rise in step with income fluctuations. Luckily, income tax savings from donations rise and fall as well. For example, imagine that you know your income will be substantially greater in 2006 than it is in 2005. If your tax rate is 28% in 2005, you expect a tax rate of 39.6% in 2006, your relative tax deduction on a $10,000 would be $2,800 for a gift made on or before December 31, 2005 and $3,960 for a gift made on or after January 1, 2006.
*If you are in the fortunate position to be making large donations and your income varies from year to year, plan to make large donations during the higher income years.
Not all charities soliciting for good causes are eligible to receive tax-deductible contributions. "Tax exempt" means the organization does not have to pay taxes. "Tax deductible" means you as a donor can deduct contributions to the charity on your federal income tax returns. In the United States, organizations designated by the IRS as a 501(c)(3) organizations are both tax exempt and can receive tax-deductible contributions.
Generally, humanitarian, religious, medical, and educational organizations qualify, while political organizations and other nonprofits do not. Be sure to ask for charity's tax exempt letter, which should specify whether they can accept tax-deductible contributions.
*Refer to IRS publication 78 for a listing of current 501(c)(3) registered nonprofit organizations. Note that this only matters if you want the tax deduction: not having a 501(c)(3) status does not mean that the organization is not promoting a good cause. Just be informed, so that you make the decision and the donation that is right for you.
Donating to charity does not have to be a reaction to a request. You know what is important to you, and you want to make a difference. Create a giving strategy. Think about the kinds of missions you support, and research charities that advance those missions.
Contact charities and discuss what kinds of gifts they most need, and how you can most effectively help make a difference in your community. Taking such a proactive approach will help you feel confident in and proud of the gifts you're giving.
Charitable organizations are nonprofit organizations; this means that the money they collect goes to operating the charity and supporting the programs and activities that fulfill its mission.
Most charities need money, material goods, and volunteers. While this breadth of needs can seem overwhelming for both nonprofit organizations and the people seeking to help them, it does provide innumerable opportunities for you, as a potential donor, to find the most appropriate way of contributing to a cause that you want to support.
|Jennifer Mathes, Ph.D.|