It seems that every Sunday when I visit my Mom for dinner, she shows me a pile of envelopes from charities asking for money. She regularly sends modest checks to several groups, but they always seem to want more. I remind Mom that giving tends to trigger more asks, and she often complains about the waste of paper and postage from the solicitations she throws away. Mom\u2019s giving tends to be reactive \u2013 responding to those who ask \u2013 we\u2019ve talked about ways it could be more proactive and fulfilling.<\/p>\n
One place to start is with the question: Why give? Not everyone has the same answer. My Mom might say she gives because someone asked, and because they seem to do good work. She also gives where she has a connection, like her university and the public radio station. (I don\u2019t think she\u2019s influenced by the endless supply of stickers and address labels that charities send, but she does have an impressive collection of note pads).<\/p>\n
Reasons for charitable giving range from practical to personal. Tax deductions can be a motivator, but so can an experience like a family member with a chronic illness. And of course many people give where they go \u2013 to the arts, kids programs, and their house of worship. There\u2019s no \u2018right\u2019 way to give; you should do what feels right for you.<\/p>\n
Giving should make you feel good; you shouldn\u2019t be doing it out of guilt or competitiveness. When choosing a charity, does it lift you up knowing what they could do with your dollars? Similarly, the amount you give should be based on what feels right \u2013 and gives you joy.<\/p>\n
Until recently, a lot of my own charitable giving has been related to my daughter\u2019s school and activities \u2013 theatre, robotics, and music. Now that my daughter is out of school, I\u2019m starting to re-think my own giving plans. And I\u2019ve learned a few things:<\/p>\n
If you give a little to a long list of charities, you may notice that, like my Mom, you\u2019re always being asked for more. You can make a bigger impact if you just focus on a few charities and make more meaningful gifts. There are many organizations out there doing lots of good work, so it can be difficult to decide. Let your values and passions guide you. One person may choose to help animals or the local food bank, while someone else puts money behind disease research or education. Choosing your focus helps you make an impact \u2013 and gives you permission to toss a lot of solicitations into the recycle bin.<\/p>\n
Recently I was thinking about the need in our community for services to help unhoused people. I decided to do some research to figure out where a donation would make a difference and align with my values. I read how tiny house villages can provide secure shelter and a transition to permanent housing. I knew I wanted to give locally, so I did some online reading focusing on organizations that work in my community. Once I found a charity that fit, I found articles about them in the local paper and reviewed their website. After making my donation, they put me on their email list so I could keep up with their activities.<\/p>\n
Legitimate charities will be transparent about their activities and expenditures. They have to follow rules that require them to make financial disclosures. You can get information directly from the charity, and on independent sites like Candid, Charity Watch, or Charity Navigator.<\/p>\n
In my corporate job there was a little-known policy that allowed management employees to direct a certain amount of giving each year to a favorite charity. It was basically free money that would allow me to support any non-profit of my choosing. Many companies have programs like this. It helps them connect with the community in a way that\u2019s meaningful to their employees. And it saves them the hassle of choosing among deserving local organizations. You can usually find information about matching or directed grants on your company\u2019s benefits page.<\/p>\n
Just because an organization is asking for your money doesn’t mean your donation is tax deductible. Many well-known groups engage in lobbying or political activity which means you wouldn’t be able to deduct your donation. Terminology can be confusing. A \u2018tax-exempt\u2019 organization doesn\u2019t have to pay taxes, but may not be a 501(c)3. Only a \u2018tax-deductible\u2019 designation provides you with a potential benefit on your income tax return. If you\u2019re unsure, ask to see the charity\u2019s 501(c)3 letter from the IRS.<\/p>\n
You can greatly simplify your annual giving by doing it once a year. Define your goals, decide your budget, research organizations, then make your donations. But you might also want to set aside part of your giving budget for needs that pop up unexpectedly. This gives you the ability to respond to natural disasters or causes you just learned about. Just make sure you\u2019re cautious about fraudulent requests for money that pop up around big world events. If you get an urgent ask from a charity you\u2019ve never heard of, be sure to do your research \u2013 otherwise, stick with an established organization that may already have people on the ground in an impacted region.<\/p>\n
Generous giving can make you feel great about sharing with others and supporting the community. It can also provide tax benefits and a lasting legacy. And you don\u2019t just have to give cash. Your financial planner can show you strategies like donating stocks, setting up a donor-advised fund, or planned giving. They can also help you establish a budget that balances your objectives with your financial situation.<\/p>\n
As for me, I\u2019m still trying to encourage my Mom to shred most of the mail she gets from charities so she can focus on more significant contributions to groups that align with her values. I\u2019m also trying to practice what I preach, allocating more substantial funds to a few charities so I can really support their good work.<\/p>\n
As the year end approaches, your friends at Arrivity thank you for being a client and wish you and your family a safe, joy-filled holiday season.<\/p>\n
If we can be of assistance with your financial planning needs, please contact us at\u00a0206.217.2583 or<\/p>\n