Although the official “Holiday Season” generally starts on Thanksgiving weekend, the charitable component started a few days later with #GivingTuesday on December 1st. Those of us living in Minnesota are probably familiar with “Give to the Max Day” which takes place in mid-November as an opportunity for many charities to leverage the giving spirit, which has been a big success locally. #GivingTuesday is a relatively recent movement which was created in 2012 by the 92nd Street Y and United Nations Foundation as a response to consumerism and commercialization. The event takes place each year on the first Tuesday after Thanksgiving, providing a respite from Black Friday and Cyber Monday, and is designed to be a global day of giving through donations, time, goods, and your voice. Following in the spirit of giving, here are some best practices to maximize your year-end charitable giving plans and ensure the o rganizations are aligned with your goals for giving.
What causes are most important to you?
The first step in your charitable giving plan is to create a list of organizations that you have given to in the past. Then take time to think about which causes are most important to you, confirming that your philosophy of giving is fully aligned with the recipient organizations. In addition, this is a good opportunity to consider consolidating some of your giving to create greater impact. Contrary to investing your portfolio, diversification isn’t always a good strategy when giving to charity. I suggest that you focus your giving among a few key charities that most closely align with your core values. For example, if education is a key value you may choose to focus on educational organizations in your giving. In most cases, you will have more satisfaction and impact when you are able to focus on the non-profits that mean the most to you instead of responding to every fund-raising phone call or request that comes in the mail .
Involve the family
The Holiday Season provides a wonderful opportunity to incorporate the spirit of giving into family traditions. The first step is to have a family meeting that allows the kids to participate in year-end giving decisions. In addition to being an effective way to instill the spirit of giving early, it is also an opportunity for family members to share individual perspectives about which causes are most important to them. Each family can develop their own traditions over time, including pooling money together, rotating the selection process for charities, or establishing a gift fund for kids to give from. Regardless of the dollar amount or organization selected, involving the family in the giving process will have long-term effects on your family members along with the charities.
Do your research
While considering which charitable causes are the best match for your giving goals, it is also important to initiate a research process to find the best organization to receive the gift. Start by looking at the mission of the organization to confirm that it is fully aligned with your intention. Then look at the finances and general management of the organization, with an emphasis on what percentage of your donation will be eaten up by the general management relative to how much will go toward the underlying cause. It is important to take advantage of online resources during this research process, including Charity Navigator, CharityWatch, Charities Review Council, and Guidestar. Also, if you want to receive a tax deduction for your charitable gift you will ne ed to ensure that it’s a tax-exempt organization which can be done with an on-line tool at the IRS website.
Maximize your gift
Now that you (and potentially your family) have gone through the process of selecting where your charitable giving will go, it is important to follow a few important steps to ensure that the gift will be maximized. The first step is to give directly. Many charities pay 40% to 80% of the proceeds received through professional fundraisers, particularly those who solicit donations over the phone, so the best advice is to hang up and give directly instead. In addition, try to avoid using credit cards to make your donation since the charity will need to pay the credit card fees (typically 3% to 5%), immediately reducing the desired impact. Many employers also have matching programs which should be utilized whenever possible to increase the value of your gift. Finally, consider using appreciated assets as either a direct gift or through a donor-advised fund to incorporate additional tax savings.
Wrapping up your gift
Whether your charitable giving efforts line up with a hash-tag or not, the next few weeks provide a wonderful opportunity to embrace the spirit of giving. This is a time where many of us share stories about family traditions, both old and new, which provides another opportunity to expand the giving community. Regardless of your decisions about charitable giving, we sincerely appreciate the gift of your attention to this article. Best wishes for a safe and happy Holiday Season!