5 Tips for End-of-Year Charitable Giving

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Man and woman helping in soup kitchen

As the year draws to a close and Americans gather to celebrate the holidays, December is typically the time when charities get the highest volume of donations. The National Philanthropic Trust reports that nearly all (94 percent of) Americans give to charity, with an average annual household contribution just under $3,000. This year, Giving Tuesday campaigns (the Tuesday after Thanksgiving) raised over $45 million, but there’s still time to support your favorite cause.

We talked to Sandra Miniutti, vice president of marketing and chief financial officer for CharityNavigator, an independent charity evaluator, for strategies on maximizing the impact of your charitable contributions.

Get specific about your interests. Before you choose a charity, think about the issues you care about and how you want to help. Do you want to support cancer research? Dog rescues? Childhood literacy? Then match your interests to a non-profit organization whose work impacts that area. “Many times a mistake that donors make is they don’t double check that the mission matches their interests,” Miniutti says. “They assume that a charity with cancer in its name does research, but it could be more about awareness or patient support.”

Do your homework. Rather than giving proactively when you get asked to donate, be proactive in choosing a charity that makes a real impact. “There are one million public charities, and there’s not a lot of oversight by federal government or states, so it’s important for donors to vet the charity before they invest it in,” Miniutti says. She suggests that donors look at three key areas: financial health, governance policies and results. “Is the charity spending the bulk of its money on programs?” she asks. “Make sure it’s growing over time and has some rainy day funds to fall back on if times get tough.” (Websites like CharityNavigator.org and GuideStar.org can help with this.) A sound non-profit should have a diverse board of directors (not all family members) and conduct an annual financial audit. For the results piece, “can they show you the impact that they’ve been having?” Miniutti asks. “It could be really beneficial to volunteer with a local group and see the organization in action.”

Concentrate your giving. Unlike your investment portfolio, where it’s smart to diversify and spread around your money to different industries, Miniutti says it’s best to focus on supporting a few charities. “Lower your risk in the non-profit sector by concentrating on a couple of charities, so you make sure you’re vetting them annually and following up on their progress,” she says. “It means you’re able to make a more substantial gift to each charity and that can make a difference to each non-profit.”

Get a receipt. Giving cash to a charity solicitor outside a store may seem convenient, but you won’t get a receipt for tax purposes and it’s easy to forget the amount. The IRS states that you need written acknowledgement from the charity if you plan to deduct a charitable contribution of $250 or more. Charities must also provide a written disclosure statement for quid pro quo contributions over $75 (that is, donations for which you receive something in return, such as admission to a charity dinner). Miniutti suggests donating by check or credit card to help maintain better records than cash. “For a donor, it can be easier to keep records if you do it online,” she adds.

Check for an employer match. Some companies match charitable donations made by employees. In fact, the Committee for Encouraging Corporate Philanthropy found that in 2010, 94 percent of companies offered at least one matching-gift program. Check with your employer before you donate, because matching funds could help your donation dollars make an even bigger impact on the organization’s mission.

Photo credit: Getty Creative

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