BEFORE YOU DONATE….

by Galia Gichon on November 18, 2009

When examining your finances before year-end, one way to save on taxes for this year is to contribute to your favorite charity.  It is a win-win situation on both counts, you feel good and it saves you money on your taxes.  It is something you would probably do anyhow, but why not give a bit extra so you can save on your taxes this year?  Before you whclipart_charityip out the checkbook, here are a few things to think about:

1) Have you checked out the charity itself? charitynavigator.org.  It is a charity evaluator that lists the breakdown of dollars donated that actually go towards the charity. For example, Doctors Without Borders, one of my favorite charities, uses 87.3% of their money towards their mission.  What is your charity’s percentage?

2) Bundle your charitable contributions. If you found yourself giving $50 here, $50 there, you might not be giving as much as you like or alternatively, giving too much.  Set a budget in January for how much you would like to donate this year.  Then plan out your spending over the course of the year.  You can reevaluate during the year, but like any other part of your spending plan, have a plan and stick to it.  You will feel clearer about your financial donations and intentions.  Another way to make it fun is to keep all the donation notices (with the pictures of the cute polar bears) you get throughout the year in a separate folder.  When November rolls around, take them out and write your checks based on your financial intention. 

3) If you aren’t donating…. Let the charity know.  It probably costs them a great deal of money to keep sending you notices.  Do them a favor and let them know so they can save money (and trees too!).

{ 1 comment… read it below or add one }

Ashley Whittenberger February 2, 2010 at 8:11 am

Excellent advice. We’ve started planning our charitable donations each January, and it helps us to say no and stay on budget when we’re bombarded with requests throughout the year.

On the reverse side, if you’re raising money for a cause, I can see how it would benefit to ask waaaaaaaaaaay in advance so organizations can plan. Sort of like a “save the date” card. A “save your funds” card. 🙂

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