How to Give Wisely and Well
Giving to charity has never been easier. Youcan donate the old-fashioned way--by mail--butyou can also donate online, by text, or throughsocial networking sites. According to theNational Center for Charitable Statistics, over1.4 million nonprofit organizations areregistered with the IRS. With so many charitiesto choose from, it's more important than ever toensure that your donation is well spent. Hereare some tips that can help you become both agenerous and wise donor.
Choose your charities
Choosing worthy organizations that support thecauses you care about can be tricky, but itdoesn't have to be time-consuming. There areseveral well-known organizations that rate andreview charities, and provide useful tips andinformation that can help you make wisechoices when giving to charity (see sidebar). Toget you started, here are some questions toask:•
How will your gift be used?
It should be easyto get information about the charity's mission,accomplishments, financial status, and futuregrowth by contacting the charity by phone orviewing online information.•
How much does the charity spend on administrative costs?
Charities withhigher-than-average administrative costs maybe spending less on programs and servicesthan they should, or may even be in seriousfinancial trouble. Some charities who usefor-profit telemarketers get very little of themoney they raise, so ask how much of yourdonation the charity will receive.•
Is the charity legitimate?
Ask for identificationwhen approached by a solicitor, and nevergive out your Social Security number, creditcard number, bank account number, accountpassword, or personal information over thephone or in response to an e-mail you didn'tinitiate. There's no rush--take time to checkout the charity before you donate.•
How much can you afford to give?
Stick toyour giving goals, and learn to say no.Legitimate fundraisers will not try to make youfeel guilty, and will be happy to send youinformation that can help you make aninformed decision rather than pressure you togive now.
Harness the power of matching gifts
Many employers offer matching gift programsthat will match charitable gifts made by theiremployees. You'll need to meet certainguidelines--for example, your employer mayonly match your gift up to a certain dollarlimit--and the charity may need to provideinformation. Check with your employer's humanresources department or the charity to find outhow you can maximize your donations througha matching gift program.
Put your gifts on autopilot
If you're looking for an easy way to donateregularly to a favorite charity, look into settingup automatic donations from a financialaccount. When donors contribute automatically,the charity benefits by potentially loweringfundraising costs and by establishing afoundation of regular donors. And you'll benefittoo, because spreading out your donationsthroughout the year may enable you to givemore, and will simplify your record keeping.
Look for new ways to give
Although cash donations are always welcome,charities also encourage other types of gifts.For example, if you meet certain requirements,you may be able to give stock, direct gifts fromyour IRA or other retirement account, realestate, or personal property (but check withyour financial professional to assess potentialincome and estate tax consequences based onyour individual circumstances). You can alsovolunteer your time, using your talents toimprove the lives of others in your community.And taking a "volunteer vacation" can be a funway to involve your family and meet otherpeople across the country or world who shareyour enthusiasm for a particular cause.
Use planned giving to leave a legacy
You can leave an enduring gift through yourestate. For example, you might leave a willbequest, give life insurance, or use a charitablegift annuity, charitable remainder annuity trust,or charitable unitrust that may help you giveaway the asset now, while retaining a lifetimeinterest--check with your financial or taxprofessional regarding any potential estate ortax benefits or consequences.
Keep good records
If you itemize when you file your taxes, you candeduct donations you've made to a tax-qualifiedcharity, but you may need documentation. Keepcopies of cancelled checks, bank statements,credit card statements, or receipts from thecharity showing the charity's name and the dateand amount of the contribution. For donationsor contributions of $250 or more, you'll need amore detailed written acknowledgment from thecharity. For more information and a list ofrequirements, see IRS Publication 526,Charitable Contributions.
These are a few of the organizations and agencies that publish reports and charity ratings, and/or give useful tips and information to consumers on choosing a charity and giving wisely: •Better Business Bureau's BBB Wise Giving Alliance,www.bbb.org •Charity Navigator,www.charitynavigator.org •CharityWatch,www.charitywatch.org •Federal Trade Commission,www.ftc.gov
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