If you are lucky enough to be able to donate money this year, there are many reasons to worry about.
In a year like 2020, choosing where to head your dollars is like choosing your favorite child. Should your money be used for nonprofits that provide basic needs, organizations that fight for social justice, or a campaign to help local small businesses stay afloat? If you prefer to donate your time, how do you give back when volunteer events are limited by the pandemic?
Here’s a guide on how to prioritize your donations, use special tax deductions for 2020, and use your vacation expenses to make a difference.
Dec. . 1 is Giving Tuesday, a day dedicated to generosity during the holiday season. This year you can not only help those in need, but also receive additional tax breaks for your donations.
Under the Coronavirus Aid, Relief and Economic Security Act, taxpayers who apply the standard deduction will receive an additional deduction of up to $ 300 for cash donations. Previously, charitable contributions could only be deducted if the taxpayers were broken down.
Taxpayers who do a breakdown can deduct up to 100% of their Adjusted Gross Income for cash donations (up from 60%) in 2020.
These incentives do not apply to all contributions – only contributions to qualified public organizations that the IRS defines as « those having a religious, nonprofit, educational, scientific, or literary purpose. ». Contributions to donor advised funds, non-operating private foundations and support organizations do not qualify for deduction.
The choice of reason for support is deeply personal. If you haven’t already, make a list of your values and what you are grateful for. That list will be the foundation of your fundraising plan, which will help you determine which causes need to be prioritized and which to say no to, says Jeannie Sager, director of the Women’s Philanthropy Institute at Indiana University.
Sager says you can also use a donation plan to design your promotions without hitting the donate button.
“What kind of volunteering do you do? What messages do you send when you retweet or share things on social media? How does that fit your philanthropy and your values? “She suggests asking yourself.
At the start of the pandemic, you may have committed small generous acts such as:. B.. buying gift cards to support your local coffee shop or paying your hairdresser when the salon was closed.
Keep up the community spirit, says Eileen Heisman, president and CEO of National Philanthropic Trust, a nonprofit that manages donor-advised funds and is based in Jenkintown, Pennsylvania. “I’m a big fan of small charities,” she says. “A lot of everyday art organizations in the neighborhood, small ones, are disappearing. ”
Research by the Women’s Philanthropy Institute in the early months of the pandemic showed that organizations that advocate for basic needs and health outperform those that focus on religion, and especially better than those that work for all other purposes Education, art and art serve the environment.
Resources like Charity Navigator and GuideStar can help you research a charity’s financial health, tax-exempt status, and practices. You can also visit your local community foundation’s website to get a picture of nonprofits that you can support.
« We encourage people to work hard for some purposes rather than distributing money for many purposes, » said Grace Chiang Nicolette, vice president of programming and external relations at the Center for Effective Philanthropy in Cambridge, Massachusetts.
Unrestricted gifts tend to be most useful for charities, says Nicolette, referring to donations that don’t include requirements about how the money is used.
This holiday season, 65% of Americans say the pandemic will affect the way they choose to give gifts. At least 3 in 10 Americans (30%) say they send money or gift cards, and 28% say they send gifts to loved ones whom they usually give gifts to in person, according to the NerdWallet 2020 Holiday Shopping Report.
Around one in eight Americans plans to spend more on charity, and nearly one in five plans to spend less on donations in 2020 than in 2019, the report said.
If you can’t put money aside for donations, use your online vacation purchases to give back. Many online retailers make it easy to donate when you check out or buy gift cards, such as donating. B.. through the Paypal Giving Fund or the Amazon Smile program.
Heisman suggests using apps that round up your purchases and donate the difference to charity. Boomerang Giving, ChangeUp For Charity and GiveTide are a few examples.
You can also donate your unused airline miles or credit card rewards to charity. However, be aware of the disadvantages. The charity may not always receive the full amount of your donation, and you may not be able to use that contribution towards CARES law tax deduction.
This column was made available to The Associated Press by the NerdWallet personal finance website. Amrita Jayakumar is a writer at NerdWallet. Email: ajayakumar @ nerdwallet. com. Twitter: @ajbombay.
Tuesday Giving, Nonprofit, Donation
World News – US – Millennial Money: Be Effective With Your Generosity In 2020
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