The season of giving and sharing with family and friends is upon us. For many people it is also the time for donating to communities, causes, and charities they care about. Whether your budget for making charitable donations is small or large, there are ways to increase its effectiveness that benefit recipients and donors.
Following are five tips for making the most of your charitable contributions.
Select charities or causes you are passionate about. Look into their transparency, how efficiently they use donated funds, and the impact they make. Focus on a few causes rather than donating smaller amounts across many organizations. This ensures your contributions have a more significant impact on those specific causes. Candid (aka Guidestar) Charity Navigator, and Charity Watch can provide insight into the effectiveness of charities and non-profit organizations. Many charities publish the percentage of every dollar they receive that goes to directly to the cause or causes they support. Getting a clear picture of this is one way to avoid giving your money to scams or ineffective organizations. As the Charity Watch website says, “You cannot rely on the government to protect you from bad charities.”
Consider setting up regular donations instead of one-off contributions. Monthly or quarterly donations help charities plan better and sustain their operations. It also allows you to give more over time and be consistent in your support. Also, remember there are different kinds of assets that can be donated, including securities and tangible goods. Side note: if you have a desire to get “in the know” with an organization, making regular contributions (in money or time) is an effective way to get there.
Many employers match charitable contributions made by their employees. Before contributing, find out if your company offers such programs. They can effectively double the value of your donation.
Sometimes, non-monetary donations like clothing, food, or volunteering time can be as valuable as cash. If you have skills or time to offer, consider volunteering for a cause you care about. Nonprofits often need various forms of support beyond monetary donations, and many donations of this kind can be tax-deductible.
Understand the tax benefits of your donations. Keep records of all donations, including receipts or acknowledgment letters from charities. Consult with a tax advisor to ensure you’re taking full advantage of available tax deductions for charitable giving.
By considering these tips, you can ensure your charitable contributions have a meaningful and lasting impact on the causes you support. And remember, there are many people looking to profit off the goodwill of other. Be alert to scams and frauds. To protect yourself better, read our blog post about charitable donation scams.
Lafayette Federal is here to help. If you have questions about charitable donations, we can point you in the right direction, and offer the resources you may need. Of course, we always recommend talking with a financial advisor or tax specialist to best understand how any donation will impact you financially.