By Stephanie Yates
When I work with younger students, we talk about three things that we can do with money. They are:
This time of year, I tend to think more about sharing money with others. Here are a few tips to keep in mind when planning your giving.
Declutter and Do Good
Do you have family coming for the holidays and you need every inch of space? Why not get rid of some of your gently used items and help those in need? Many charities will be happy to receive your unwanted items. They may pass them along to their clients or sell them in order to raise cash. In fact, many will even pick up your items. Just be sure not to donate items that are heavily soiled, worn, or broken. Why not incorporate donations as part of your regular decluttering routine? Keep a box or basket in the closet for clothes and other items that can be donated. As you come across items that you know you will no longer use, just toss them in the basket. When the basket is full, make a list of all of the items and call your favorite charity for a pickup. There IS an exception to the rule about only donating items in relatively good condition. If you have old sheets, towels, and blankets, animal clinics and shelters typically would love to have those items. You may have to drop them off, but your donation will be greatly appreciated. Again, always make a list of any items that you donate so that you can account for them on your taxes.
Support Those Who Support Your Spirit
Don’t forget about your favorite religious organizations when you are considering sharing your money. If you regularly visit a house of worship, there is no donation too large or too small. Some folks distinguish between tithes and offerings, where tithing is thought of as giving 10 percent of your earnings whereas an offering is given freely. Whichever way you view your religious donations, just make sure you keep good records. Avoid making donations in cash unless you use donation envelopes that allow you to identify yourself. That way, you can get an annual statement for your taxes.
Monitor Those Monetary Donations
If you choose to give cash to a charity, you may want to do your research to make sure that they are making good use of donated funds. That may not be necessary if you are donating to large, well-known charities. However, for smaller charities, some detective work may be in order to ensure that your money is being put to good use. You can do a quick check on the Internet at either charitynavigator.org or guidestar.org. You can find out how they’ve spent the funds that they raise and an overall rating. It is best to give to charities that are highly rated, registered as nonprofit organizations, and spend as much of their funds as possible on programming versus administration.
Keep Good Records
As I’ve mentioned a few times, be sure to keep good records of your donations. If you itemize your deductions on your taxes, you may be eligible for a deduction. For tangible (non-cash) donations, most charities will simply give you a letter or a receipt acknowledging the donation and the date but with no assigned value. Assigning a value to your donations is up to you! Don’t worry, free programs like ItsDeductible can help. You will just need to keep specific records. For example, write down “five pairs of women’s jeans” instead of “big bag of clothes” to get the best value estimate.
Leaving a Legacy
If you have significant assets, you may also want to think about giving as a way to create a lasting legacy. There are a few ways that you can do this. You could work directly with an organization to arrange for a planned gift that fits your specific wishes. Alternatively, you can set up a charitable foundation or trust. Both will provide you with tax advantages, but may be expensive to set up. Therefore, this route may only make sense if you plan to make major donations over time.
If giving is important to you, there are many ways to accomplish your goals. Just don’t forget to include your giving as part of your overall budget so that you’ve covered all three bases in managing your money!