Year-End Charitable Giving Tips
An estimated 25 percent of all charitable donations are made between Thanksgiving and New Year’s. Charities increase their solicitations during this time of year to appeal to the characteristic goodwill of the holiday season.
Americans have a “giving impulse” to respond with help or donations to causes or organizations that tug at their heartstrings. But before you answer each request that comes your way, consider these tips for effective charitable giving:
DO consider what causes or charities are meaningful to you. Once you’ve identified them, research their mission, leadership and the metrics they use to demonstrate their success or impact. Giving shouldn’t be a hand-out, it ought to be an investment in a cause that matter to you.
DON’T give to everyone that asks. Fewer, larger gifts are easier for you (fewer gift receipts to keep organized!) and better for charities because a higher dollar amount signals your commitment to the organization. Set a budget at the beginning of the year to help you stay on track throughout the year. I also recommend leaving a cushion in the budget for the unexpected, like disaster relief or meaningful campaign that resonates with you.
DO stick with a charity over several years, if you support what they’re doing. Organizations spend more to attract new donors than to retain those who have already given, which means your gifts in the second or third year are even more valuable.
DON’T overlook your assets. Gifts to charity don’t have to come in the form of cash. If, for example, you have appreciated stock that has been held for more than a year, you can donate the stock to charity. By doing this, you can receive a tax deduction at the fair market value, avoid capital gains and effectively increase your gift to charity substantially more than if you sold the stock, paid capital gains taxes and then donated the proceeds.
DO consider giving an unrestricted gift. Donors can (sometimes unintentionally) hamper an organization’s ability to do its job by giving overly restricted gifts. Gifts that are designated for highly specific purposes sometimes mean that charity’s can’t spend the money to meet their greatest need. Maintenance costs, current technology and training programs are part of an organization’s overhead—consider making an gift that can fund those mission-critical expenses.