Eileen St. Pierre, The Everyday Financial Planner
Charitable giving knows no age. Young children all the way up to senior citizens can experience the saying “it’s better to give than to receive.” In fact, according to Social Capital Community Benchmark Survey, those who donate to charity are 43% more likely than non-givers to say they are happy about their lives.
It can be difficult to decide to which organizations you should donate your hard-earned money. Here’s a list of questions to answer when choosing a charity:
- What is the charity’s mission?
- What is its past record of performance?
- What % of funds is used towards its mission?
- How much money goes towards salaries and administrative expenses? What about marketing expenses?
- Do you want your money to stay in your community or help those in distant parts of the world?
There are ways to investigate charities. Some helpful websites are:
- Charity Navigator http://www.charitynavigator.org – to find charity’s rating and performance record, compare charities, and use its Top Ten lists to find charities
- Better Business Bureau http://bbb.org/charity – to access the BBB reliability report, determine if the charity is BBB accredited, or file a complaint
- Your state’s Secretary of State office to access the charity’s filing records
- Philanthropedia http://myphilanthropedia.org – to search for charities for a certain cause
Keep in mind that your smaller, more local charities may not appear in some of these databases. In these cases, you may want to choose charities closer to home so you can personally investigate them.
Another benefit to charitable giving is that donations may be tax-deductible for those who itemize on Schedule A. For cash contributions, you will need a cancelled check, credit card receipt, bank statement, or a letter from the charity that shows: (1) charity name, (2) date, and (3) the amount. Your own personal record will not suffice.
Many of us donate clothing and personal property. Goodwill has a valuation guide on their website to help you determine the value of those bags of clothes you collected after cleaning out your closets. The guide is available at
To qualify for the tax-deduction, items must be in good condition. If their value exceeds $500, you must have an appraisal. If you donate a car with a value above $500 which is then sold by the charity, you are allowed to deduct the gross proceeds or fair market value. You will also need to attach Form 1098-C.
Charitable giving also includes volunteering your time. For tax purposes, you are allowed to deduct:
- Travel to volunteer activities @ $0.14/mile
- Cost of attending conventions
- Uniforms if not suitable for everyday wear
- Other reasonable expenses because of the services you gave
There are lots of ways to give to charity. By taking the time to investigate your chosen charities, that warm glow of giving can last a lot longer.
Visit my Taxes page for more information.