The Benefits Of Donating To Charity
It can be overwhelming if you’ve never given to a charity before. How do you choose the right charity? How does giving to charity factor in when it comes time to file taxes? What happens if I give as an individual vs. if I give through my business?
No matter what organization you decide to give to, we hope this article can help you navigate the process with some more certainty so your gift can make the most impact in a way that matters to you.
How to Choose the Right Charity
“Right” is a subjective term and it boils down to a personal choice that you make as a donor to a charity. That being said, there are a few things we’ll go over that may help you with researching a charity and ensuring your funds will be used toward a mission you can get behind.
The first thing you will want to do is to explore a charity’s website or other channels such as their social media to get a sense of what their mission is and whether that aligns with your interests. If so, for a charity to be recognized as an official non-profit, they will need 501(c)3 status which is provided by IRS and indicates that this organization is tax-exempt.
You can visit sites below to gather more information on non-profits as well and ensure your charity of interest is accredited:
Charitable Donation Deductions - How Does it Work?
Finances and taxes can be very specific and should always be approached with consideration to the latest tax law and rules. With that in mind, the language below from Consumer Reports is a good way to look at deductions and how your donations may factor in relation to the tax laws that changed in 2018:
“If the numbers show that you're better off taking the standard deduction, consider a "bunching" strategy—that is, timing your gifts to shift more donations into a single tax year. By consolidating your giving in this way, you may be able to donate and still claim a tax break.
Say a married couple has $18,000 in deductible expenses, which include $4,000 a year in charitable donations. Under the new tax law, they would be better off claiming the $24,000 standard deduction. But by making an $8,000 gift every two years, raising their deductions to $26,000, they could get a write-off and still give the same amount.” - Source: https://www.consumerreports.org/charitable-donations/tax-benefits-of-donating-to-charity/
If you’re curious how much companies give relative to individuals, according to a study conducted by American Express and The Chronicle of Philanthropy, small companies donate an average of 6% of their profits to charity. Source: (businessnewsdaily.com)
If you’re curious what the limits are for charitable donations are generally for individuals, it can be up to 30 percent of your adjusted gross income. Source: (fidelitycharitable.org)
Benefits of Giving to Charity
Now that we’ve covered the potential financial savings and benefits associated with donating to charity, let’s explore some of the more qualitative considerations to giving.
According to the Charities Aid Federation, some of the top reason to give include a feeling of community strengthening personal values and through leading by example, you may also inspire or encourage friends and family to do the same and join you in your effort. Source: https://www.cafonline.org/my-personal-giving/long-term-giving/resource-centre/five-reasons-to-give-to-charity
In this piece by popular website Money Crashers, charitable giving goes a lot further than just personal fulfillment, it also contributes to a larger sense of community investment and building. No matter the cause you are giving toward, you join a group of like-minded and similarly inspired individuals who see a need that needs to be filled and have enough belief and encouragement to show that support through your gift.
We hope this blog post has helped answer questions you may have about the benefits of donating to charity. If you have questions about For the Unseen related to donations, please contact us at info@fortheunseen.org.