‘Tis the season when many of us are feeling extra generous. Whether we are dropping spare change into the red bucket outside the grocery store, donating clothes and housewares, or spending time volunteering, the holidays find us in the mood to spread cheer by giving time and donations. As we kick off the charity season on Giving Tuesday
, here are some tips for making your charitable contributions count and how to maximize your donation:
Once you’ve identified a charity with a mission you’d like to support, be sure that it is a qualified charity. This means they’re subject to tax regulations outlined by the Internal Revenue Service (IRS) so you may deduct donations made from your taxes. The IRS has a free online search tool, Tax Exempt Organization Search
, where you can search for qualified tax-exempt organizations. (Note: You can’t deduct donations given to individuals, political organizations or political candidates).
Do your homework
In addition to choosing a qualified charity, be sure that it is a reputable organization. Poke around their website and research the organization. Look to make sure the contributions they receive predominantly go towards their mission instead of high operating costs and that the organization isn’t linked to negative news. Consider a tool like GuideStar
which provides information on more than 1.8 million IRS-recognized tax-exempt organizations, including their mission, programs, results, and financial details. Or check out Charity Navigator
, a free website that gives charities a 0 to 4-star rating based on financial health, accountability and transparency.
And don’t be afraid to share your intentions for how you’d like your donation used. If there is a particular program or type of recipients you’d like to direct your funds toward, let the nonprofit know!
Understand tax deductible contributions
In addition to positively impacting the community around us, gifts to qualified charities are tax deductible. Itemized deductions can be made on your federal tax returns by filing a Form 1040. Be sure to hang onto any record of cash or property you donate in order to claim a deduction – this record is essential for anything with value over $250. More detailed rules apply
if you benefit from a donation, need help determining the value of donated property, or if you make large non-cash donations.
Take advantage of matching campaigns
In some cases, you can double your impact by having your gift matched. This means for every dollar you donate, a person or organization will donate a dollar (sometimes up to a certain amount). Matching programs are sometimes offered by a generous funder or through an employee participation program. Crack open your employee handbook to see if your employer offers a matching program and consider donating to charities with matching programs in place to make your money go further.
The key to maximizing your holiday contribution is to give to a charity you feel passionate about and that will make an impact on someone or something important to you. Whether it’s $5 or $500, it’s true what they say during the holidays, it’s better to give than to receive
Happy holidays from our family at Point Breeze Credit Union to you and yours.