There’s no better way to get into the holiday spirit than giving back to the community. While some people choose to donate money and gifts, others may decide to roll up their sleeves and volunteer to help out the less fortunate.
In fact, 74 percent of Americans plan to donate to a nonprofit organization or charity during the holidays, according to a fundraising technology developer Convio, which projects $48 billion in total donations between Thanksgiving and Christmas. That’s a 30 percent increase from last year.
If you’re looking for a way to do your part to help out this holiday season, here are a few ways you can get into the spirit too.
Soup Kitchens and Food Banks
Thanksgiving may be over, but that doesn’t mean that the soup kitchens and food banks are closed. In fact, since most homeless shelters get flooded with well-meaning volunteers in late-November, you’re better off waiting a few weeks until after Turkey Day to spread out the efficiency of your time and effort.
You may be able to volunteer through an organization you’re affiliated with like a community group or at your job. If not, you can find a local homeless shelter or food bank through directory sites like Homeless Shelter Directory or FeedingAmerica.org. There are also many local and regional directories online to help your search.
According to JustGive.org, while you most likely won’t get any tax benefits for volunteering your time and effort, the IRS does reward you for donating actual items with monetary value. For donations to charitable organizations such as Toys for Tots or the Make-a-Wish Foundation, be sure to get a in-kind receipt so you have proof of your gift.
Monetary Charitable Contributions
Money is always welcomed when it comes to making donations. Since a cash contribution really comes down to a hard number, it is easier to track the value of your donation. The problem, though, is tracking how your contribution is used. Aside from fraudulent organizations and charity scams, even well-meaning nonprofits have been guilty of squandering their funds through inefficient administrative costs or poor financial management.
If you’re curious how much of your money is actually going toward a just cause, ask for a form 990, also known as a “Return of Organization Exempt From Income Tax”. These tax forms are required by the IRS to be submitted by nonprofit and tax-exempt organizations and state how funds are being spent.
Give Back the Right Way
It may sound strange, but there’s such a thing as a bad charitable donation. To make sure you’re maximizing the impact of your contribution, you’ll need to do a little due diligence on who and what you’re giving back. This is even more important if you want to enjoy the tax benefits of your good intentions.
- Check for Legitimacy: Nonprofit and tax-exempt organizations will fall under 501(c) status, usually with an additional number to represent the type of organization it is. The most common charity status is 501(c)(3).
- Get Feedback: Even if an organization has a legitimate status, it doesn’t necessarily mean it’s a good charity. Check for ratings, reviews and comments past contributors may have on sites like GuideStar.com, the American Institute of Philanthropy and the Better Business Bureau’s Wise Giving Alliance.
- Tax Benefits: Not all contributions are tax deductible. Don’t confuse terms like tax-exempt charities with tax deductible contributions. They don’t mean the same thing. To get a tax deduction, you will need proof of your donation and itemized your tax return on a 1040 form.
We’ve all heard that it’s better to give than to receive, and with the holidays here, there’s no better time to get in the charitable mindset than by helping out someone else in need. Just make sure you do it the right way.
How do you plan to give back during these holidays?