The fourth quarter holidays are often seen as one of the prime times to take out your checkbook — not only do many charities put in extra efforts helping others this time of year, but donating is also a smart financial move. Giving to a charity before the end of the year can help reduce your tax burden when April 15 rolls around.
Here are five crucial do’s and don'ts when it comes to charitable giving.
DO: Make Sure the Organization Has Clear Goals
When you give to a charity, you want to know that the funds are going to good use. This can require research to identify which charities make the best use of donated funds. Nonprofit and government organizations are required to create certain financial reports so potential donors can see what percentage of each donation directly benefits those in need. Plus, doing a deep dive into the operations of a charity you’re considering supporting can help avoid falling for a scam.
DON'T: Feel You Need to Give to Every Charity
There are tens of thousands of potential charities: how do you choose? Whether you prioritize charitable giving to organizations that serve a mission close to your heart, are part of your community, or fulfill some other objective that interests you, it's important to plan your giving so that you're not stretched thin.
DON'T: Assume Giving Time is Preferred Over Money
You may be tempted to donate your time or volunteer with a charity in lieu of donating cash. But ultimately, most charities will tell you that money does go farther than donor hours. Coordinating a team of volunteers may require additional time and effort, while paying for professionals can be far more efficient.
DO: Keep an Eye Out for Fake Websites
Charity scammers are out in full force during the holidays, mimicking nonprofit websites to try and skim donations from unsuspecting victims. To avoid charity scammers, follow these tips:
- Avoid clicking a link to visit a charitable website via a donation button or from a link emailed or texted to you. Instead, navigate directly to the website from a search engine or your address bar. Just clicking on the link could redirect you to a dangerous site.
- Don't donate until you find evidence that a charity exists and is legitimate. If a charity can’t be found via a Google search or doesn't have a legitimate website, it may be false.
- Before you send a donation by mail, verify the mailing address from the charity’s site.
DON'T: Forget About Charitable Donations After the Holidays
Many charitable organizations are inundated with donations and volunteers over the holidays, only to see many of these resources dry up once New Year's Day arrives. If you want to really make a difference all year long, consider scheduling monthly or quarterly donations to provide continuous support for your favorite causes. In addition to giving, you can also check into volunteer opportunities, another way to remain involved with charities closest to your heart.
Important Disclosures:
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.
This article was prepared by WriterAccess.
LPL Tracking # 1-05337697.