Here are 4 tips on donating to charities:
Friday, September 20, 2013
The Importance of Giving to Charities
Do you donate to charity? Do you know why you donate to a specific charity? Do you make anonymous contributions or like to receive recognition? Whom do you give to, and why? Do you donate to small charities or larger ones? Do you donate only to tax deductible charities?
Google executive Sheryl Sandburg states that less than 1/3 of the money that individuals gave to nonprofits in 2005 reached the poor. A study by the Center on Philanthropy at Indiana University showed that only 8% of charitable donations provide basic necessities, food and shelter. Sandberg names two possible explanations for this “charity gap”: (1) It is easier to give to those in our own communities than to the truly economically disadvantaged who are outside our immediate circles of relationships; and (2) donors do not fully understand where their contributions are going.
Sandburg encourages Americans to consider the disconnect between their desires to do help the poor and the destination of their money. Americans donate the most to religious groups, education, foundations, health care organizations, human services and arts and humanity groups.
The US average for donating to charities is 2% or $76. The wealthy spend 3% of their monthly spending towards charity. Most charitable states are: Delaware, Washington, DC , Kansas, Oklahoma is the top state, and Washington. The United States is in the lower half of the top 20 of all countries that donate to charities. Approximately 86% of professional athletes donate to charities.People give based on their identity: who they are and how they view themselves. The degree to which identities are flexible, involve a willingness to act, and help make sense of the world has significant implications determining whether and how much people give.
Individuals who donate to charity may deduct contributions on their federal tax returns. Contributions must be made to legitimate charity to receive a deduction; contributions to a specific person may not be deducted. Keep careful records of money given through bank records or written communication from the charity, which includes the name of the organization, the date a contribution was given, and the amount. For a deduction of $250 or more, individuals need written confirmation from the charity proving that the donation was contributed and if the charity provided any goods or services in exchange for the donation. Donating to charities provides a way for you to help others. You can donate to charities in several ways: through money, non-cash donations or time. Now more than ever charities need your help. There are so many people suffering in the United States and across the world but they need your help. Here are 6 questions to consider when donating to charities:
1. Is the charity recognized as a non-profit by the IRS? It’s necessary in order to write the donation off.
2. What percentage of my donation will go to the charities? Should be 75%+
3. How long have they been in operation? 5+ years, a proven track record is key
4. Have you been reducing services? If yes, that could be a red flag.
5. Do you have a year’s worth of operating capital? If yes, then it shows staying power.
6. Remember to get and store your receipt!
Here are 4 tips on donating to charities:
1. Charitable Organization. The organization must be recognized by the Internal Revenue Service as a 501(c)(3) tax-exempt nonprofit organization. Verify status by checking www.charitynavigator.org and www.guidestar.org.
2. Keep receipts. If you donate a cash gift greater than $250, the charity must acknowledge the gift in writing. If less, you’ll need a receipt, canceled check, or credit card statement. If you do payroll deduction, you need the pay stub or W-2 and they’ll provide acknowledgement saying this deduction was a charitable contribution. For non-cash gifts, request a receipt with the name and location of the nonprofit, date of the donation, and description of the item.
3. Give appreciated assets. Appreciated assets include stocks and real estate. By donating an appreciated asset, you can get the tax deduction based on the current value, not the lower value of the property when it was obtained.
4. Volunteer work deduction. Out-of-pocket expenses related to the volunteer work, can be deducted.