Ray’s Take Charities are facing increasing demand and costs and more cautious donors given the uncertain economy. They look to individuals for more than 80 percent of their funding. Many believe that “giving back,” if they can afford to and are meeting their other responsibilities, is part of being a good citizen. However, it is important to do basic due diligence so your donations are effective.
Before you give, make sure you know who you are giving to and how your money will be used. Ask for an annual report or go online to learn more about your charity. Learn how much of your donation actually goes to your cause and how much covers salaries and administrative expenses. The American Institute of Philanthropy recommends that at least 60 percent of the money you donate should go to the actual cause. Be careful with charities that claim to spend a lot on “public education” as this can be fund-raising costs.
While it may not be relevant to your charitable giving choice, you should know whether your gifts are tax deductible or not. Just because a charity is tax exempt doesn’t mean your contributions are tax deductible. Excepting places of worship, the charity must have 501(c)3 status from the IRS. You can either ask your charity or go to www.irs.gov and look for “Publication 78” for a complete list.
If you attend dinners, galas, or other ticketed events for charity, you can only deduct the amount of your ticket that ultimately goes to the cause. Unless the event’s cost is underwritten, that amount could be surprisingly small. The claim “proceeds go to charity” actually means that only the money left after all expenses will actually be donated.
Of course, you can also donate goods, appreciated stock, property, or even your time. However, valuable as it is, there is no tax deduction for time; and other contributions often face changing guidelines and deductibility limits, so check with your financial advisor or accountant before making large gifts.
But do give. Just understand a bit more about what you’re really giving.
Dana’s Take Even though it’s not tax deductible, donating time to your cause is one of the most rewarding ways you can give. It not only gives you a first-hand look at operations, it also opens your eyes to the needs of others.
In Haley Kilpatrick’s book about middle school angst, “The Drama Years,” she recommends volunteering for tweens and teens. She says that when teens share their talents with those less fortunate, it puts their problems in perspective. It’s also an opportunity to make a new set of friends – possibly with a less entitled outlook.
Whether your talent is cooking, reading, singing or gardening, a local charity needs your special gifts. It’s an investment that pays dividends for the volunteer and the community.