Thirty percent of all charitable donations happen in December and about half of those happen on the last three days of the year. Chalk it up to the generosity of the season … and the deadline for a tax-deduction before the end of the year.
But the fact is, nobody ever got rich by making a charitable donation. The tax-deduction is not the main reason why people give. They give because their generosity aligns with the change they want to see in their world. Remember that more than 70% of all donations are made by individuals – not corporations and not foundations. So your gift is important and needed.
THINK ABOUT WHAT REALLY MATTERS TO YOU
Once you let go of the belief that your donations define you, you can start to have more fun as a donor. There isn’t one perfect charity for you, rather a different one at different times in your life. What cause has been on your mind lately and who’s doing good work there? Trust me, every nonprofit loves their donors… even if they’re not always good at saying it.
MAKE SURE IT’S A REAL NONPROFIT
First, make sure you’re donating to a 501c3, tax-exempt organization. To find out, use the IRS Tax Exempt Organization Search, which lets you search by organization name or Employer Identification Number of EIN. Just remember, the name you search for might be different from the name the organization is registered for with the IRS. You can always find the nonprofit’s EIN on their website, or just call and ask them.
BTW, GO FUND ME IS NOT A NONPROFIT
If you find yourself wanting to donate to an individual’s campaign on GoFundMe, Facebook, or another online giving platform, feel free, of course. Just remember, these are considered “personal gifts” and not donations, and are therefore not tax-deductible (even though they use the word “donation”). Only donations made to GoFundMe charity campaigns, are guaranteed to be tax-deductible and will receive tax receipts automatically from its charity partner, PayPal Giving Fund. Donations to these campaigns are collected by PayPal Giving Fund, a non-profit organization, and distributed to the designated charity. Hopefully, you knew that.
Donations to a charity via Facebook may be tax deductible. Look for a receipt to the email registered with your Facebook account to see if your donation qualifies.
YOU PROBABLY WON’T NEED TO ITEMIZE ON YOUR 2018 TAXES…
…so you may not have to consider the charitable tax deduction as much. In January 2019 is when the new tax rules take effect, which means the donations you make from here through December 31, 2018, will fall under these new rules. All this means is that those who just take the standard deduction instead of itemize will most likely continue to do that. For those who do itemize, you might want to take a look at the standard deduction this year. In most cases, it’s increased to almost double from previous years. Chances are that fewer people will itemize on their 2018 income tax return just for that reason.
Will that lead to fewer and smaller donations? Maybe. If you can’t take a charitable tax deduction, what’s the point of making a donation? (Just kidding. I know GivingCity readers don’t give just for a silly-old deduction. Keep being you!) Or… you could always give more to charity and have your itemized deductions be more than the standard deduction. Think about it.
MAKE IT A RECURRING GIFT
If you can make that donation now, is it an amount you can give every month? Think about it. Is it relatively painless? If so, check the box to make it a recurring donation. You won’t ever miss it, and at the end of next year, you’ll have given 12 times more than you thought you could. Now you’re a philanthropist.
Photo by Brooke Cagle on Unsplash