December 23, 2019 · Budget, Taxes

Helping Others During the Holidays with Charitable Donations

During the holidays many people not only give gifts to family and friends, but in the spirit of the season also help those less fortunate than themselves. Historically, the United States has been one of the world's most charitable nations, and it is estimated that in 2018, Americans gave more than $425 billion to U.S. charities. While giving may provide a sense of goodwill and satisfaction to the giver as they support a worthy cause, it should also be noted that making a donation to an organization that is considered by the government to be a non-profit is often tax deductible—but the donor must give the money by December 31. Donating money and deducting it from your taxes could be considered as both doing important good for the charity and doing well for yourself.

If you're still considering donating to a charity (or charities) this year, you should be certain that you've thoroughly thought through and researched them. Here a few questions to ask before finalizing your donation decision:

  • Is the organization(s) a non-profit under U.S. government regulations? To be considered a non-profit by the federal government, it must officially fall within the Internal Revenue Service's regulations, section 501(c); most charitable organizations have the specific legal status of 501(c)(3). The charity should be able to give you confirmation of both of its 501(c)(3) status and also of your donation for tax purposes.
  • Is it a cause that you truly believe in? Does the charity support causes, activities, and beliefs that you are passionate about and is strongly deserving of your financial aid?
  • Is the philanthropy fiscally responsible and efficient? This is important because some organizations may have such high operating costs that that a significant portion of donations they receive do not go directly to the people the charity is trying to help, instead a large chunk of the money it raises just keeps the charity going. A well-run organization is efficient and responsibly ensures that a high percentage of the funds it receives goes directly to people it's focused on serving.
  • Related to the above question, can the charity provide provable facts about how it is progressing in achieving its objectives? As examples, these facts could include meals served, families sheltered, clothes given out, medicine distributed, homes built or repaired, surgeries performed, scholarships awarded, textbooks given away, research grants funded, animals saved, trees planted, nature preserved, and many other forms of measurable evidence of ongoing success.
  • Do you care whether the organization is local, national or international in the scope of its work? Do you want to support a group that is active only in your city or state, in the U.S., or in other parts of the world? For some, it’s important that they help the area where they live and where they may be able to see or experience the results of their generosity. On the other hand, with so much need in the world, there are donors who prefer that their funds are spread across the globe.
  • Do you want to give an unrestricted or restricted donation? An unrestricted donation means that the charity may use as your money however it considers appropriate, while a restricted contribution is directed by you only to specific programs or activities within the organization, such as hunger relief or free medical care. However; keep in mind that not every charity will let you make a restricted donation.
  • Should you split up your donation(s) between multiple charities or concentrate them with one organization? Do you prefer to support a variety of causes or solely give money to a single cause?
  • Would you like to give the gift in your name or someone else's? You may be able to donate on behalf of family members, friends, or in memory of someone who's deceased. If you donate for another person, it could be considered a double gift—one for the charity and one for the person named in the donation.
  • Did you consider that money is not the only way to donate? You may donate canned food, toys, clothing, books, furniture and many other items to charities. You may also give of yourself, such as assisting in a homeless shelter, building or repairing  homes, donating blood, reading to the seeing impaired, bringing meals to those in need, teaching, or working in a pet rescue and adoption center; these are just a few of the many, many ways you may help others with your time, knowledge and effort.

Holidays are an opportunity to enjoy our families and friends, to celebrate the end of the current year and our hopes for the new one. They give us the chance to bring joy and hope to others, both people we know, and those that we don't. As we close out 2019, consider thoughtfully if there are groups and causes you might like to assist with donations before the end of the year.