Charity: Reasons To Give To
It feels good: Feeling good about yourself generally accompanies giving to charity.
You may get extra consideration: Although you shouldn't assume that your donation will guarantee you special treatment by the charity or hospital to which you contribute, it is possible that you will receive special attention if you need the association's services. This can be especially true if you volunteer and make personal contacts with people at the organization. Keep in mind that any promise or agreement to get special consideration in return for a donation would negate any charitable tax benefits. It is best to avoid even the appearance of a charitable arrangement.
Help fund research: If you give to a charity that funds research about your condition, you can help make it easier to live with your health condition, or even to find a cure.
Giving money to organizations that do advocacy can multiply the value of your contribution if it obtains federal dollars for the cause.
Employer-Matching Programs: Some employers have matching-grant programs that double the amount of your contributions.
Income Tax Savings: Gifts to tax-exempt organizations are generally tax-deductible as long as you itemize deductions on your tax return. This can reduce the amount of your taxes or make the gift less expensive, depending on how you want to look at it. For example, if you are in the 28% tax bracket and donate $1,000, your taxable income will be $280 lower with a corresponding lowering of your tax. Another way to look at it is that the "real" cost of the gift is only $720. For more about charitable contributions and taxes, including making sure that the organization qualifies, see Tax.
In addition, if a gift to a tax-exempt organization is of an asset other than cash, and there is a gain in the current value, there is no tax on the gain. For example, if the gift is of marketable securities that cost $6,000, but are now worth $10,000, the contribution is valued at $10,000. You do not pay tax on the $4,000 gain ($10,000 - $6,000).
Estate Reduction: If your estate is of a size that it is subject to estate tax, making gifts is a good way to reduce your estate's size. To learn more, see: Estate Planning.
Distribution of Assets: Making gifts of money or property while you are alive, instead of through your Will:
- Gives you added control over who gets what, and when.
- Permits you to experience the recipient's delight with your gift.
- Relieves the worry that your wishes won't be honored.
Reviewed by: Jerry S. Chasen, Esq.
Chasen & Associates, P.A.