Give your Way – Explore different avenues for philanthropy
May 10, 2023
A few weeks ago, I was honored to be part of one of my favorite nonprofits, Junior Achievement’s fundraiser. Junior Achievement’s mission is to inspire young people and prepare them for success. They do this through programs that teach entrepreneurship, financial literacy, and career readiness skills. In case you didn’t know, I worked at this same nonprofit for about five years before joining MainStreet. So not only do I believe in the mission, but I truly understand how a donation can make a big impact. There are many ways to donate to charity.
- Cash Donation: This is the most popular way to donate to charity. Donations can be made directly to the charity or through a third party platform. Many charities have websites that allow online donations using credit cards, debit cards, PayPal, and other online payment platforms, but at the end of the day, it’s still considered cash. Cash donations can be one-time or recurring.
- Donation of goods: Many charities accept donations of clothing, furniture, household items, and other items. Donations can be deposited at the charity’s donation center or arranged to be picked up. here If you qualify for tax credits, it’s a great way to assess the value of these items. Real estate donations require receipt from the charity and a special form (IRS Form 8283) is required for tax purposes for items totaling over $500. Items with a total value of 5,000 yen or more require an appraisal.
- Donation time: Charities often need volunteers to help with events, fundraisers, and other activities. You can donate your time and skills to help the charity achieve its mission. This is especially valuable if you are unable to donate financially. Find an organization that will talk to you and offer help.
- Donor Preferred Fund (DAF): A DAF is a charitable giving account that allows individuals, families, or organizations to contribute to the foundation, receiving immediate tax deductions for donations while allowing grants to be distributed to charities over the long term. DAF provides a centralized giving vehicle that allows donors to support multiple charities from her one account. Donors can remain anonymous if desired and there may be administrative costs associated with DAF. Here’s an additional Mainstreet article that delves a little deeper into this topic.
- Qualified Charitable Distribution (QCD): QCD is a way for individuals over the age of 70 and a half to donate funds to eligible charities while reducing their taxable income. The Requirement Minimum Distribution (RMD) is met by donating up to $100,000 annually to charity. Not only does this reduce your taxable income, but it also allows you to do charity work without separating items, which is also beneficial for those who receive the standard deduction. In order for QCD donations to be done properly, there are some very important things that need to be adhered to, such as donations (RMDs) must be sent directly to the charity instead of first being sent to the account holder and then to the charity. has specific rules.
- Donate securities or other assets: Some charities accept donations of stocks, bonds, real estate, and other assets. This can be an effective way for individuals to dispose of valuable assets without paying capital gains. These types of donations can offer tax benefits to donors, but certain rules, such as retention periods, must be kept in mind.
- Legacy Donation: Here, you can make charitable donations as part of your estate planning by including the charity in your will or designating the charity as a beneficiary of a trust or life insurance policy.
- Donating at work: Many employers offer workplace giving programs that allow employees to donate to charity directly from their paychecks. Some employers match the employee’s contribution. Be sure to check with your employer to make sure all amounts are put to good use.
- Crowdfunding: Here you create a fundraising campaign for a specific charity and ask your friends, family and social media followers to donate.
Many of these donation options are simple, while others are more complex. It may be a great idea to consult with a tax professional or financial advisor to determine what charitable giving strategy works best for your unique situation.