Be in the know this holiday giving season
While we donate to charity year-round, the holidays present even more opportunities to support worthy nonprofit organizations — but take a minute before you start writing those checks.
Certainly there are a lot of additional needs this time of year, from kids who need warm coats as the weather becomes colder to families struggling to put meals on the table or toys under the tree. These causes can really pull on our heartstrings as donors plan their own family celebrations throughout the season.
Mailboxes and email accounts quickly fill with worthy asks. And while you might like to say yes to all, your budget might need some boundaries. That’s why it’s important to go into this holiday giving season with a charitable giving strategy that will help you be confident you’re providing support to the charities of your choice.
Here are some tips to help you get started:
Know your goals. Charitable giving is a deeply personal endeavor. Donors should consider two important activities when determining what cause or causes to support. First, write down an inventory of causes you find important. Consider what sort of charitable organizations perform the activities you wish to support. Are your goals local, national or global in scope? Are they issues that impact your own community or are they challenges for a community far away?
Know your budget. You should determine how much support you are able to provide. Not all donors can make large donations to a large number of organizations. There are a number of ways to go about this: Do you want to make a larger donation to one organization or support more organizations with a number of smaller donations? Would a one-time lump sum donation be the best option or would a reoccurring monthly donation be better?
Know the organization. Whether you have chosen to support natural disaster relief efforts in a foreign country or pet rescue activities in your own community, it’s important to be sure the organization is reputable. Most well-known national and local organizations are safe bets for donors. Hearing about an organization that is generally supported by national and local media, local businesses or many friends and neighbors can be an easy way to determine a charitable organization’s legitimacy. For a more in-depth overview of a particular organization, consider checking out the organization on websites like charitynavigator.org or charitywatch.org.
Know the rules. If you are hoping to receive a tax benefit for a contribution, there are a few things to keep in mind. First, no donation is deductible without proper documentation. For donations less than $250, a canceled check or a receipt is enough for the IRS. For contributions in excess of $250, a bit more documentation is required. In cases of donations of more than $250, the organization should provide a letter specifying that no goods or services were provided in exchange for the donations, or the value of the goods or services that were provided so that value is not included in the deduction.
Know how to avoid a scam. To a large extent, abusive or fraudulent situations are much less likely to happen with well-known organizations. Donors should be wary, however, of any solicitation made over the phone, even if the caller identifies as being from a well-known organization. If you receive a telephone solicitation for a donation, be sure to ask for the organization’s website. After checking to make sure it is a legitimate, you can then feel comfortable to make a contribution online or by calling back at the official phone number.
By sitting down early to decide which organizations to support as well as how much support to provide, you can avoid making snap decisions that may not fit in with your overall giving strategy — and make it a better holiday season for all.
Gary L. Riedlinger, CPA, PFS, is a principal in the Saginaw office of Yeo & Yeo and the director of tax services for the firm. He co-leads the tax services team and is a member of the financial products team. Riedlinger has more 35 years of public accounting experience. He can be reached at firstname.lastname@example.org.