Four Keys to Charitable Giving

The 4^th quarter of the year is already here, and many people do the bulk of their charitable giving at the end of the year. By the 4^th quarter, most people know what kind of a year they have had and whether or not they are in the position to make a donation. They also have a fairly good idea of what their tax obligation is likely to be for the year and whether or not maximizing write-offs by increasing charitable giving is going to be necessary this year. Probably the best reason to give this year though is simply that it’s been a very difficult year for millions of people who are in need of help. Charitable giving is expected to be down this year, but here are some ways to make the most of the donations you make this year.

- Define Your Goals: Your charitable giving strategy should have a vision and a mission that dictates the types of charities that you’re willing to consider for donations. Think about issues that are most important to you and about your overall goals as a philanthropist. Many givers even write out their personal mission statement for charitable giving to define the types of philanthropic opportunities worthy of their dollars.

- Decide On Donation Amounts: There are several ways to decide how much to give. Some people make donations based on a percentage of their income for the year or based on a percentage of their net worth. Others go with a number that just feels right. Remember that donations do not have to be monetary—many organizations are just as eager to receive your contributions in the form of time spent volunteering for that organization. This is a great solution for people interested in giving but who aren’t in a position to simply write a big check.

- Investigate The Charity: There are a lot of causes out there that seem worthwhile on the surface but run too inefficiently to be effective. When you’re making a donation, you want to make sure that as many cents as possible out of every dollar are going directly to the cause you intended to donate to. Request financial information for the charity and examine the expenses associated with the administration of the organization. Most charities have people devoted to spreading that charity’s message who can tell you what the charity does to minimize expenses and maximize the impact of every investment dollar.

- Find Matching Opportunities: Many employers offer their employees the opportunity to maximize their charitable giving by matching that donor’s contributions. If you’re planning on giving money to a charity, contact your HR department first and ask if your company has a policy on matching employee donations. Usually filling out a simple form is all it takes to double the value of your donation.

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