10 Tips for Making Smart Charitable Contributions

The holiday season is here, and many people are swept up in the wonderful  spirit of giving to others.  If you plan to donate to charitable organizations this year, here are some tips to help you make sure your end-of-the-year contributions are the most effective:

1. Be sure you’re giving to a reputable, legitimate charity.  Each year, fake charities pop up, sometimes with very similar names to legitimate charities you may be familiar with.  Learn about current charity scams and other important information about charities here: www.charitywatch.org
2. Do not give donations to someone who calls you on the phone or knocks on your door unless you are familiar with the person.  It’s harder to verify whether the money you give will actually go to the charity you think it will support, and the person may not actually be representing the organization you think they are.  Thank them for calling/visiting, and ask for the organization’s website.  Then you can contact the charity directly by phone, mail, or visiting their website to make your donation to ensure it gets where you intend it to go.
3. Check to see if your favorite charity is a 501(c)(3) organization, and whether or not your donation will be tax deductible.  You can do research about your charity at www.give.org or www.charitynavigator.org
4. Always get a receipt that shows the date, charity name, and amount of your donation.  You’ll want to keep these receipts as part of your personal supporting documents for your taxes.
5. Note that if you received something in exchange for your donation (like a fancy dinner or even a tote bag), you must subtract the value of that item from the total amount you donated before making any deduction on your taxes.
6. Find out how much of the money you donate actually supports your intended cause.  Charities that support the same cause (ex: hunger in your community) often have very different expense ratios.  Look for an organization that will be able to use most of the money you donate to support what you intended, instead of a large percentage going to salaries and overhead expenses.  You can usually find this information in the organization’s annual financial reports.
7. Ask if your employer matches donations—you may be able to double the impact of your financial gift!
8. Make your donations before December 31 in order to deduct them on your taxes.
9. Check with your tax preparer for any other important information you may need to know about this year’s donations.
10. Don’t forget that you can also help organizations by donating items they may need (EX: dog food for a dog shelter),  or donating your time as a volunteer.

Gifts of all sizes are appreciated and will make a difference to the organizations that you support.  We wish you a happy holiday season and happy New Year!

Need help filing your taxes?  As a member of MVCU, you qualify for tax discounts through Love My Credit Union Rewards!

Learn more

Category: Our Community