Maximizing Your Charitable Contributions
Tis the season to give…not only gifts to loved ones but donations to charity. Over the holidays, we heard at least one discussion about whether or not one should give when an organization calls you on the phone. Finance expert Jean Chatzky provided some insight about maximizing your charitable contributions in a Today.com quiz aimed at readers for Giving Tuesday (the Tuesday after Thanksgiving, Black Friday, and Cyber Monday).
Taking Donations Off Your Taxes: All donations are not tax deductible. You have to donate to a registered 501(c)3. You also have to itemize your taxes and depending on how much you earn, itemizing may or may not make sense for you.
Spreading Out Your Charitable Contributions: Many people wonder if it makes more sense to give a small amount to many organizations or to give larger amounts to fewer. According to Chatzky, “you’ll make a bigger splash, and a bigger impact, by giving more dollars to fewer causes.” This does make mathematical sense since as she notes, charities spend money trying to get donations. However, if you really want to spread out your charitable donations, you can. Some organizations get a morale boost from having a larger number of donors, even if the donations are small.
Giving Directly on the Web: Chatzky recommends giving via websites to donate to organizations that call you over the phone and to give to the victims of natural disasters. Why? Fees. Some organizations outsource those soliciting phone calls so some of what you give will go towards those expenses. And when you text to donate, you may incur a fee depending on your plan. Also, “donations via SMS can take up to 90 days to be received by the actual charity.”
Overall, giving does your heart good but if you are concerned that your intended recipients will not receive as much as you would like, do some research before opening your wallet.