Year-end Charitable Giving Guide

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Hopefully, you survived Black Friday, Small Business Saturday, and Cyber Monday today… Tomorrow is Giving Tuesday and if you’ve been with me long, you know that I am a HUGE fan of giving!!  The holiday season is all about giving to others.  I love this time of year because of that.  It warms my heart hearing stories on the news of anonymous givers paying off someone’s layaway account or buying dinner for some officers on their lunch break.  Even the stories of the big tips to waitresses, ahhhh!! I cry every time. Giving is such a cornerstone of our finances, it has been both rewarding and important to us.  The end of the year is also a good time to give to get your tax obligation down for the year.  Here are things to think about as you prepare your year-end giving.  

I have been very forthcoming with our priority to tithe year round.  This is something we feel called to do and did so during our debt pay off and will continue to do so forever.  I talk about what it means biblically to tithe here and while that’s not what this article is about, it’s always important to me to mention it.  We know that we are blessed beyond what we give because we tithe and while that’s not why we do it, I certainly encourage you to tithe as well.

We treat charitable giving and tithing differently.  Tithing is something we’re called to do and charitable giving is something we choose to do above and beyond the tithing.  Charitable giving is a great way to use your money to bless others in need.  Having sat on multiple non-profit boards I know that year-end giving is always greatly appreciated. 

If you’re going to give to a non-profit make sure that the organization aligns with your morals and ethics and please do your research!  Sure there are a lot of feel-good organizations out there but unfortunately, there are folks that can and will take advantage of you.  We never give to a charity unless we are both in 100% agreement with each other on the organization.  We also don’t give on a whim or spontaneously.  Those are boundaries we set so that we can discuss the opportunity and be sure that we understand the organization. 

When it comes to giving to a non-profit, make sure that they are a legitimate 501(c)3 organization.  This designation means that you can deduct the donation on your taxes.  It also means that the organization is following a series of rules necessary for them to maintain that status.  These organization makes their financials public, has a board of directors managing it and are audited by independent CPA firms.

When researching a non-profit, you want to understand what their overhead percentage/ratio is.  This number will tell you how much they spend on overhead.  Overhead includes things like staff salary, office space rent or mortgage, office and printing supplies, etc.  Contrary to what some think, a non-profit overhead percentage should not be zero, or even close.  Non-profits need talented folks leading the organization and those folks should be paid for their efforts.  It also costs money to raise money so there definitely should be some overhead. 

That said, the percentage should not be too high either.  I am comfortable donating to an organization with an overhead percentage of 20% or less.  That’s not to say that you shouldn’t give to an organization with a higher percentage but just be sure you understand why their overhead is so high.  There are some bad ones out there so while you’re researching, do a quick google search to see if they have any pending federal investigations or fraud allegations against them.  Also Google “the Worst American Non-Profits” and see how the organization your researching stacks up. 

I will not name any of the bad organizations here but I cannot urge you enough to do your research.  This shouldn’t deter you from giving but just confirm that you’re giving to an organization that will handle your hard earned money appropriately.  I’m all for spending safely but giving safely is critical too. 

A few things to remember:

  1. Check with your CPA or tax preparer to see what your tax obligation might be this year. They can do some number crunching to see how much you might want to give by year end.  Do this sooner rather than later… they’re busy this time of year!

  2. When you give, keep a record of your donation and get a receipt if possible. Your take preparer or CPA will be grateful!

  3. Give from your heart. If you want to give $5, give that.  $5,000 – that’s great too!  There is no magic number just give what works best for you and/or your family and your budget!

  4. Remember the natural disasters from 2017… We were in South Texas last week and the devastation from Hurricane Harvey is still very real.  Maybe you can donate to a cause to aid in the relief efforts of all that happened this year.

A few organizations we give to:

  • Samaritan’s Purse – You can give a monetary donation or find a place to participate in their “Shoebox Campaign”. You can even build a shoebox online – it is way fun!

  • UCOUNT Campaign – 100% of your donation goes to their efforts to fight human trafficking.

Not ready to give financially?!  That’s ok!  Here are some non-monetary giving options:

  • Donate your time! Head to a local soup kitchen or other service organization and see how you can help. If you have a local United Way, call 211 from your phone.  It’s free and they’ll have service opportunities to share with you.

  • Bake a pie or something yummy for some neighbors. This is a great way to spread some holiday cheer without breaking the bank.

I hope these details remove any question in your charitable giving and add to your cheer of this holiday season.  As always, if you have any questions, please reach out!  I am just an email away!  

Until next time, spend safely.

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