One way to make donations without touching your money is to donate valued assets, such as stocks. Nearly half (47 percent) of donors said they would contribute more if they could apply for a larger tax deduction, but most donors aren't taking full advantage of the deductions that already exist. One way to make donations without touching your money is to donate valued assets, such as stocks, directly to a charity. By doing so, you may not need to pay capital gains taxes for stock appreciation, which will effectively increase your gift and reduce your tax exposure.
While these things are difficult to measure, donors may have become more sophisticated in their donations as useful information about charities has become more detailed. Prospective donors should pay special attention to scams and fraud during the holiday season, when people are short on time and are overwhelmed by requests for donations, and after high-impact disasters and emergencies. People donate money to non-profit organizations with the best intentions, but they should be aware of potential scams and fraud from charitable organizations. Compassionate philanthropists can donate to their local animal shelter because they adopted their family's pet there and had a positive experience with that organization, or they can donate to their alma mater's scholarship fund as a way of giving it back.
Four out of 10 donors surveyed had questions about whether to keep the money for their personal needs or donate it to charity. Then, set aside some time to talk about where they want to donate the contents of their jar, where you'll deliver yours, and what other charitable donations you make. Understanding the various reasons behind donations can help you determine the best way to donate for you and, ultimately, to which charities, causes and non-profit organizations to donate. However, it's important to research and vet organizations before donating to ensure that your money is being used ethically and effectively.
GiveWell conducts extensive research to demonstrate that recommended charities are “proven, cost-effective, scalable and transparent,” says Alexander Berger, its senior research analyst. If you're a demanding donor, you'll need a set of guidelines that tell you if your donation will be used primarily for the mission of a charity and not for peripheral activities. An advocate of this philosophy could donate to organizations that work directly with homeless populations or with people suffering from hunger and malnutrition. After making a donation to an organization, it's natural to want to see the effect your contribution is having.
People who are guided by this philosophy would probably contribute to a children's hospital in Asia than to one in North America, since the same donation could help more children abroad than at home. Online websites such as Guidestar and Charity Navigator can be useful to a certain extent, but especially when donors are considering a significant amount for themselves, donors should look at charities more thoroughly. Both your donation method and the time at which you donate can help you maximize your impact on favorite charities and, at the same time, minimize your fiscal impact.