Being smart about charitable giving
Editor’s note: This is the first in Giving Matters, a monthly series of articles about charitable giving and philanthropy in the First State.
It’s the time of year when many of us are in the giving spirit. But some of the most meaningful gifts aren’t wrapped with fancy bows.
A donation to a charitable organization can be a wonderful gift, especially for the person who has it all. Charitable donations also help nonprofits continue their important work and may result in valuable tax benefits for the donor.
If you wish your charitable donation to be a surprise and you don’t know which nonprofit to choose, ask for advice from others who know the giving and volunteer work history of the recipient. In addition, the Delaware Community Foundation can provide information on charitable options based on the interests of your friend or relative.
If you’re considering a charitable gift, here are some tips to maximize the potential of your donation:
Create a budget
Most of us don’t go and out and buy presents without having an idea of how much to spend. The same approach works best for charitable giving. Decide how much you want to give before you start doling out donations. This is a personal decision, based on your financial situation and your beliefs about charitable giving. Whatever your budget is, you’ll get more pleasure out of giving the money away if you know you can afford it.
Rather than trying to give small amounts to every organization that asks, take the time to plan which nonprofits you want to support and how much to give to each. You’ll enjoy it more if you’re impacting those nonprofits you care most about, rather than the ones with the fastest-talking telemarketers.
Do your research
Not all charities are created equal. Some are more efficient with fundraising and administrative costs, so more of your donation actually goes into the nonprofit’s program. Identify several charities that target the causes you care about, and then research them to determine which ones will make the best use of your gift.
Good places to start your research include www.charitynavigator.org and www.guidestar.org. The staff of the Delaware Community Foundation is also available to help you learn about nonprofit organizations in Delaware and the region.
Determine the best way to make your gift
These days, there are plenty of ways to donate, from writing a check to texting a donation or going online. There are also many different types of funds for charitable gifts, all with different legal and tax implications. So for larger gifts - usually $10,000 or more - it’s a good idea to enlist some help from a financial adviser, a tax attorney or the Delaware Community Foundation.
Consider stock, real estate and other assets
Cash isn’t your only option for end-of-year charitable donations. By giving away appreciated assets, you may be able to support your favorite causes at a higher level than you might have thought by capturing valuable tax deductions and avoiding payment of additional taxes on appreciation of the asset.
However you approach your end-of-year giving - or anytime giving - the Delaware Community Foundation is available to help you meet your charitable goals. A 501(c)(3) nonprofit organization, the DCF can provide you with unbiased, expert advice.
With intimate knowledge of the nonprofit community in Delaware and the region, our team members can help you identify the causes and organizations that you want to support.
Our team members also are experts in the various charitable funds and other financial tools that can help you make the most effective gift while maximizing your tax benefits.
When you’re ready to discuss charitable giving, make the Delaware Community Foundation your first stop. In Kent and Sussex counties, contact Hugh Leahy at 302-856-4393 or firstname.lastname@example.org.
Hugh Leahy is senior vice president, southern Delaware, of the Delaware Community Foundation.