In today’s climate donating to causes we believe in doesn’t seem optional – it seems crucial! Many of us are watching organizations we care about deeply face extraordinary cuts. More and more the clients I work with (who are generally not millionaires) consider charitable giving an essential part of their financial plan. As I help clients think about their charitable giving we go through these 5 easy steps. Go through these steps yourself so you can start giving to organizations that are making a difference in the world.
Make a Plan
Choose a Mission
Use a site like Charity Navigator or GuideStar to learn how specific organizations are run and how they use donations. Don’t immediately overlook organizations that use some portion of the donations to cover overhead. Just like the companies most of us work in, charities have human beings running them. Those people would like to be paid for their work. I don’t have a problem contributing to the overhead of a well run charity.
Would you like to write off your donation on your taxes? You can deduct charitable contributions as long as you itemize your deductions on your tax return. You will also need to make sure you are giving cash or an item of value. Your time is, unfortunately, not eligible for a deduction.
Remember you must choose a qualified charity to take a deduction. You can look on this IRS website to see if a specific organization is qualified.
Save your Receipts Electronically
Assuming you are going to take a deduction for your donations it is crucial that you save your receipts for EVERY donation. In our digital age you can do this fairly easily. Personally I created a “Taxes 2017” folder in Google Drive. I then created a “Charity Receipts” subfolder. Each time I get a receipt I take a picture of the receipt and add it to the folder. During tax time I can quickly see how much I have donated and know that I have a record of each donation, should I need it in the future.
Do you wonder how much you can afford to give to charities you care about? Reach out to schedule a call and we can discuss putting together a financial plan that includes charitable giving.
Any charitable friends who might be able to use one of these tips? Please forward this information along to them.