Contributing to Charity: What Do You Need to Know?
Although the holidays are over, you probably received plenty of emails and flyers asking for contributions to a variety of charities. If you live in a major city, you probably encounter nonprofit workers asking for donations all the time. Although you might feel the desire to give back to these deserving organizations, it’s not a decision you should make lightly. Before you make a major charitable contribution, whether monetary or non-monetary, keep these tips in mind.
Fill out the appropriate paperwork.
If you can afford a big-ticket donation (either monetary or non-monetary), keep in mind that there will be paperwork involved. “For items worth $5,000 or more, there is IRS Form 8283 that must be completed by the non-profit, and an appraisal may be required for the donor to deduct the value of the donation,” non-profit professional Stephanie Cory explains. “Donors should always speak to a CPA for guidance for high-value donations.”
Go with a trusted, recognizable charity.
Ensure that the charity you want to support is legitimate and well established. “Go with a trusted and recognizable name,” Vannessa Wade of Connect the Dots PR recommends. “Ask how much of your contribution actually makes it to the intended person or event, meaning is a percentage used to fund other projects? Research online and make sure all donations are accounted for. Usually you can read a report on the company’s site to gauge how they use funds.
Do some additional research.
“Someone looking to donate should research the charity to make sure that the overhead/program ratio is according to industry standards,” Joe Perelson of Kars 4 Kids recommends. “Overhead expenses should definitely be less than 35% of a charity’s income.” If they aren’t, that could be a red flag.
Find out what the charity is equipped to accept.
While you’re in a research mood, find out what the charity is equipped to handle. “Donors should check with a charity before considering a non-monetary donation such as furniture, equipment, goods, food, etc. Most charities have gift acceptance policies that guide what they can and cannot accept,” Stephanie Cory explains.
Joe Perelson agrees, “There are many items that can be donated that will benefit a charity, but it is always best to donate to a charity that is equipped to deal with these types of donations. For example someone looking to donate real estate to a charity not equipped to handle these transactions may find himself with paperwork that he is unable to fill out properly, causing him serious legal ramifications.”
Always ask for a receipt
Although it may seem obvious, Vannessa Wade reminds us always to get a receipt. If you expect to claim the charitable contribution when tax time rolls around, make sure you get a receipt and that it is accessible and organized in time for April 15.
Don’t forget about non-monetary donations.
Pat O’Neill, CEO of YouGiveGoods.com, also reminds us that non-monetary donations are always an option. “Alternatives to monetary donations include donating volunteer time or donating goods. Traditional goods-based drives include food drives, blanket drives, toy drives, etc. Our company, YouGiveGoods.com, operates a website through which people can donate goods without having to take them to a drop-off point.”