Maximizing Your Philanthropy

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With the holidays in full swing, our thoughts turn to gifts, champagne toasts and ways to help those less fortunate than ourselves.

Charities rely on that urge to give back in the season of giving; many raise the majority of their annual budgets during the last three months of the year. It’s easy to drop a few bills into contribution jars or donate to holiday fund drives. Those causes are certainly worthy of support. But with thought and preparation, you can stretch your donation dollars to accomplish something more personal and perhaps more lasting.

What’s Your Passion?
What cause moves you most? What need do you want to fulfill? If someone close to you has had breast cancer, you may target your giving to cancer research or to helping caregivers in your community. If education is your passion, perhaps you want to support literacy efforts or programs run by your local library. Where do you feel you can make a difference?

Several services evaluate charities so people can determine whether they are giving their money in a way that will accomplish their goals. Start by researching on, and, which have financial information on individual charities, including how much of the budget is spent on administrative costs versus program costs. Or make your contributions through a donation management service such as Bright Funds, which allows you to donate money to any of six areas: water, poverty, education, human rights, health and environment. Your money is pooled with donations from others, and the service selects a package of nonprofits working in each field.

If you want to give closer to home, doubtless you’ll find many worthy nonprofits at work and know many of them already. If not, find them through news reports, searching the web for your city and your favorite cause or looking at local listings. Sites such as allow individuals united by a community or a cause to create their own groups to raise money.

If you see a need in your community that no one else is tackling, consider taking it on yourself. You don’t need to fund the entire project yourself or even do all the work. Connect with your own networks to find people who will chip in money or time needed to get the job done. Turn first to church groups, office colleagues, PTAs, book clubs or other groups with which you are affiliated. Post your project on Facebook, Twitter, LinkedIn or other social media sites. Ask your friends to share your posts, and you might be surprised at how many people you are connected to. Consider crowdfunding through sites such as You can set up a fund drive for virtually any cause, and people can contribute through the website, which takes a portion of the donations as payments. Projects funded through such sites run the gamut. Often there are drives to raise money for medical and funeral expenses and to help families displaced by house fires.

Make Money Work
Make the maximum impact with your donation by deducting your contributions on your federal tax return. Most citizens can deduct donations up to half of their adjusted gross income on their federal tax forms. The charity must have tax-exempt status and you must have proof of your contribution.

Consider giving stocks; if you’ve held the stock for a year or more and the value has increased, you can write off the contribution and avoid paying capital gains. While you’re planning future donations, consider making a bequest in your will or purchase a life insurance policy with the charity as beneficiary.

Ask representatives from your charity what else it needs. You might have property that can be used by the charity or sold to raise money. This could be a donation of land or simply everyday items. If you’re buying a new car, consider whether you can donate your old one to a good cause rather than using it as a trade-in. Go through your house; some charities need items such as clothes, kitchenware and appliances. Anything you donate is something they don’t have to buy. The items should be in good condition or better; you can deduct the value from your taxes and it will be of use. Donation is not an alternative to loading things up and taking them to the landfill.

Improving your community and helping your neighbors isn’t always an issue of money. Consider donating your time to your favorite charity. Do you have a skill that might be useful? They might need accountants, drivers, writers or people to staff fundraising events. Ask what you can do to help. In the end it might not be your money that your community needs most—it might be you.

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