When donating your hard-earned dollars to charity, you want to make sure you’re donation is having a significant impact. Maximize your gifts to charity by following these easy steps.
Include non-cash gifts as part of your philanthropic efforts
Make no mistake, giving cash to non-profits is great! But, there are other ways you can give to charity. Donating clothing and household items that are no longer of use to you is a great way to help others. Make sure you’re not overlooking the important tax documentation that list what’s being donated and when. Another option for cashless donations is gift appreciated stock. This allows you to donate the money you have invested in stocks without having to pay long-term capital gains tax.
Narrow down how many charities you donate to
There are many charities that deserve your donations but you can further your contributions by giving more to fewer charities, rather than spreading your donations thin across lots of different charities. This also goes for donating your time. Spending more time with fewer charities will help you have a better understanding of the impact you’re having.
Open up a Donor-Advised Fund (DAF)
By opening a donor-advised fund, you receive an immediate tax benefit. The easiest way to understand a DAF is by thinking of it as a savings account but for charitable giving. There are five steps in a DAF, contribute, receive a tax deduction, name your account as well as any successors or charitable beneficiaries, allow the funds to grow tax-free, and finally recommend grants to qualified charities.
Give when others aren’t
Most of the donations charities see are at the end of the year around the holiday season. While this giving season is great for charities to gain extra funds, they also see a slow giving period during the year in the spring and summer times. Giving in an untraditional time can help your dollar become more valuable to the receiving charity.