Charitable giving 101

“‘Tis the season to be charitable” > The holidays are a time of high activity for charitable organizations seeking financial donations.

“‘Tis the season to be charitable, and many charities try to capitalize on the general holiday spirit by including end-of-year appeal letters and special holiday events among the variety of fund-raising approaches they employ year round. This is also the time, before the end of the tax year, to remind potential donors about the tax advantages of making charitable contributions,” said nonprofit management professor Kirsten Grønbjerg, School of Public and Environmental Affairs.

Whether it’s a gift in the name of a friend or relative (great solution for the person who “has everything”) or an end-of-the-year tax incentive, Grønbjerg has the following advice for would-be contributors:

Familiarize yourself with new tax laws. “This year the Pension Protection Act of 2006 included significant changes in tax incentives for charitable contributions, increasing them for some donors (e.g., those interested in making tax-free distributions from their Individual Retirement Accounts) but reducing them for others (e.g., itemizers donating used property such as clothing, household items or cars).” For more information on the act, see http://wjlaw.com/PensionProtectionActFinal.htm

Check out charities online. “Competition for charitable contributions is high, and growing. There are now over 1 million charities registered with the IRS, but that excludes the very large number of small charities (revenues of $5,000 or less), and most of the estimated 350,000 or more congregations in the U.S. that are also eligible to receive charitable contributions but are not required to be registered with the IRS. Although most people give to organizations they know, information about most charities is available on the Web. For example, the IRS (http://www.irs.gov) has a searchable database of all registered charities as does http://www.guidestar.org. The latter includes also scanned images of Form 990 (financial information) for the larger ones. These resources allow potential donors to learn a great deal about a charity.”

Think outside the deposit box. “This season of giving can and should be an opportunity for everyone to give back to his or her community. While not everyone has money to give, we all can offer our time or in some way support the great things nonprofits do. That’s the spirit of the season.”

Advertisements