You can donate any time until the end of the year to qualify for a 2018 tax write-off, if you itemize on your tax return. However, many people are scatterbrained in their approach to charitable donations and don’t donate wisely. They need a strategy.
Forbes’ recent article, “5 Giving Tips For Smart Donations,” provides five key giving tips:
- Align Targeted Charities With Your Personal and Social Goals. Think about your key passions and see which institutions can best solve those problems. Then set out to research and understand all you can about those organizations.
- Are Your Selected Institutions Spending Wisely? A big tip-off is whether a charity is spending a significant amount of money on administrative and marketing expenses. Take a good look at the charity’s finances. Financially healthy organizations are ones that are both financially efficient and sustainable. They have greater flexibility and freedom to achieve their charitable mission. Make certain the charity is accountable and transparent.
- Is The Charity Effective? Find out whether the charity is making a difference. What evidence of this do they provide? Read their annual reports thoroughly and ask questions.
- Does The Charity Have Good Leadership? Solid charities will typically have formidable leaders—perhaps even more so than in the private sector. Look for a charity that has a dynamic, proven leader at the top. The organizations with high turnover typically struggle. This creates other problems. The inability to retain quality leadership is frequently a signal of instability and a lack of organization.
- Do Your Donations Work With Your Estate Plan? Remember that you have the flexibility to give some money now, but perhaps you’ll be able to give more later through your estate plan.
If you don’t have an estate plan, it’s also time to start working on that Charitable giving can be a productive part of your estate plan, serving to create a legacy and minimize taxes. Speak with an experienced estate planning attorney to create your will, Power of Attorney and other necessary documents.
Reference: Forbes (December 7, 2018) “5 Giving Tips For Smart Donations”