5 Tips for Charitable Giving
November 29th marks the calendar as the fifth Giving Tuesday. Directly following Thanksgiving and the self serving Black Friday and Cyber Monday, Giving Tuesday began as a grassroots social media campaign to help recalibrate our focus during the holiday season and end-of-year anxiety. The result of these efforts is an annual reminder that the end of the year is the season of charity. With over 26,000 organizations across the country officially supported, Giving Tuesday does more than connect the general public with charities in need, they bolster charitable giving by offering a free toolkit to these charities to help them put together a solid campaign for the year end season.
When you’ve worked as hard as you have and your family is protected, it is a great thing to be able to empower others and support the community that has supported you through charitable giving. Often times, giving back to our communities, whether it’s contributing time, money, or resources, helps us see our purpose and gain satisfaction in our work and lives. On top of helping a good cause, contributing to a qualifying charity may entitle you to a tax deduction if you itemize your taxes. Here are our five tips to get you started thinking about your charitable giving plans:
- Start with your passion: Whether it’s a cause that directly affects you or its an issue that needs support in your community, make sure your time and your money is grounded in a personal passion to be part of the solution. For example, at Tobias, we’ve dedicated our time and efforts to support the cure for alzheimer’s by sponsoring a team in the annual Walk to End Alzheimer’s.
- Be focused and consistent: By setting up a plan to give consistently to a specific cause or charitable interest, your contributions have a better opportunity to make a difference. Concentrating your charitable efforts and showing that you are part of the solution in the long run will also help the charity by alleviating some of the need to continue costly solicitations.
- Check its 501(c) (3) status: Without the tax-exempt status, you risk being scammed by an unqualified “charity” and any contributions you make cannot be counted as a charitable donation for tax purposes. Read our post on the basic IRS rules regarding charitable gifts.
- Look at the records: Requesting financial records and reviewing how much of your charitable contributions are put toward the cause versus the overhead of running the charity and paying any staff members will be very telling and help you assess whether this charity is worth its weight. Websites like CitizenAudit and GuideStar offer searchable charity databases to help your research.
- Meet with your financial planner: An experienced financial planner understands how to ensure that charitable donations benefit both the charity as well as bolster your own tax deductions. At Tobias Financial Advisors, our financial planners are happy to discuss how to build effective and community-serving charitable giving into your financial plans.
With nearly one third of annual giving occurring in December, it is important to consider these tips as part of your giving plan. By taking the time to research charitable opportunities as well as the impact your contributions will have on both the cause and your income taxes, you won’t be going into the year end giving season blindly. As a team we are already discussing our own charitable giving plans and want to know which charities and causes our clients feel connected to. This gives us an opportunity to collaborate and once again, concentrate our efforts for the highest positive impact. We’d like to hear from you. Tell us about your charitable giving ideas.