The giving season is upon us as 2014 comes to a close.  Charitable donations are an important way of giving back to our community.  If you are eager to give back or help out, just how do you decide how much to give and through whom?  For those wishing to exercise wise stewardship, these issues are significant.

An increasingly popular metric is “effectiveness,” or the ability of a charity to make a difference.  To some, this is a technical question and involves hard data, number-crunching, and non-biased analysis.  Resolving the technical questions is an easier matter in the digital age.  For example, you can log on to, among other websites, to research how “effective” your gift to a certain charity will be.

Beyond the charity’s ability to make a difference, it may be important to you to know how much of your gift will be going to pay administration and marketing expenses, as opposed to actually putting food on someone’s table or medical resources in a remote clinic.  Many potential donors balk at giving to charities that eat up more than 10% of donations with things that do not provide a direct benefit to intended recipients.

Remember, though, that measuring how a charity makes a difference is also a question of how you define “making a difference.”  How do you determine the values most important to you, and how do you prioritize among them?  One question you can ask is whether one ought to give locally or to the very neediest, wherever located.  Many veterans of charitable giving spread out their gifts among a variety of charities that carry out good works both at home and abroad.

Another thing to consider when it comes to your charitable giving is providing for your own financial security as you provide for others.  Your legal, accounting, and financial advisors can help you with such gifting vehicles as Charitable Remainder Trusts (“CRTs,” which come in several varieties and enable you to avoid capital gains taxes), Charitable Gift Annuities (which, like CRTs, provide you with an income stream and a current income tax deduction) and in-kind gifts.  In-kind gifts could be things like low-basis corporate stock or real estate which, if you sold, would result in capital gains tax liability.  If you give the stock or real estate directly to your favorite charity, you will get a deduction for the full value of your gift, without incurring a capital gain.

If you want to be sure of getting current income tax deductions for your year-end gifts, be sure to write and deliver or mail your checks, or complete your credit card transactions, by December 31.  If you are making in-kind gifts, be sure to deliver them and obtain receipts dated no later than December 31.

Time is ticking for those year-end gifts.  It is time to nail down your priorities and preferences, obtain appropriate advice, and make some important decisions.

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