The holidays ignite the philanthropic spirit in many of us, and even with the uncertain economy, Americans continue to give. In fact, according to Charity Navigator, total giving to charitable organizations was up 3.8 percent from 2009 to 2010. As in previous years, the majority of giving came from individuals – more than $211 billion of the nearly $291 billion in total giving.
Americans have raised the bar for charitable giving, recognizing that the need may be greater than ever before. Whether you are donating money, items or time, take these steps to help make sure your contributions have the most benefit for the causes you support – and yourself.
Consider your options carefully.
Chances are you’ll see more promotion for charities during this season than you have throughout the year, and many may align with your interests and passions. The challenging part is weighing your options and making decisions to find the ones that best match your giving goals.
If you are contacted by an unfamiliar charity, get the details about the organization, the nature of its programs and its use of funds before you write a check. If you have any doubts, contact the Better Business Bureau Wise Giving Alliance or go to www.bbb.org/charity for a BBB Wise Giving ReportTM on the charity.
Also make sure that the majority of what you give is actually supporting the programs and services of the organization. Of the 5,500 charities evaluated by Charity Navigator, the vast majority spend at least 75 percent of their budgets on programs and services.
Typically ten percent or less goes to fundraising and 15 percent or less is spent on administration.
Give beyond your checkbook.
If you are passionate about a particular charity, consider giving more than money. Encourage friends, family and co-workers to join you in volunteering for an event to benefit a local charity. Perhaps you can choreograph a volunteer outing in place of a holiday office party, or gather your family for a community service project. It can be a great way to build relationships with those you already know and care about, and will also give you the opportunity to meet new people who share your passions during the holidays.
Give a two-for-one.
With many people on tight budgets this holiday season, it may be difficult to afford gifts for everyone on your list in addition to a donation. Why not combine the best of both by purchasing certain gift cards that give a percentage to charity? Some allow you to dictate the charity of your choice, while others are redeemable by recipients at the charities of their choice. Online networks like www.justgive.org allow you to review and choose from a diverse list of local, national and international charities.
Make your contribution count.
Your donations to charity will not only make you feel good, they may also help when tax season comes around. If you itemize deductions, you may be able to take a federal income tax deduction for a donation to a qualified charity. You can search for the charity at the IRS website to make sure it meets the requirements for tax deductibility.
Keep in mind that there is no limit on charitable contributions for most taxpayers. There are, however, other limitations that come into play if you make significant contributions of property or stock with appreciable capital gains. If you make contributions that fall into these categories, be sure to consult with your tax advisor to see if your deductions will be limited.
Finally, don’t forget to keep a paperwork trail of your contributions for tax purposes. Having them on hand will save you a lot of headache when tax time arrives.
Make giving a year-round priority.
While it feels especially good to give during the holidays, it might make sense to build charitable giving into your monthly budget so you do it in a planned way. Talk to your financial advisor about how your giving goals fit into your overall financial plan.
[blockquote class=blue]Andrew Buscetto is a financial advisor with Mazzetti, Buscetto and Associates, financial advisory practice of Ameriprise Financial Services, Inc., 427 Bedford Rd. Suite 390 Pleasantville, NY. Reach him at firstname.lastname@example.org or 914-747-0810[/blockquote]