Charities: Lead with your Head
|
You
can choose to put money to work for you in many different
ways. Money can
also be shared with others to help those in need.
When
the twin towers of the World Trade Center collapsed in the
terrible terrorist attack of September 11, 2001, Americans
responded by giving money.
People
gave $927 million to the
Red Cross, $330 million to the
United Way, and another $140 million to the families of fire
fighters.
The
American Society for the Prevention
of Cruelty to Animals raised an
amazing $140 million for animal victims and to provide pet
therapy. All together, Americans gave over $2 billion to
help those in this tragedy.
The
act of giving and helping 9/11 victims made Americans feel
better and empowered during this tragic time.
But
Americans have always given a lot to charities – on
average: $200 billion every year.
The
average American family gives 6.5% of its income to
charity (organizations that help others).
|
Our
government allows us to write off donations on our income
tax returns. Here
are a few of the tax rules that you must follow in order to
take charitable deductions:
1.
You can only deduct 30% to 50% of your Annual Gross Income.
2.
The charity must be a non-profit classified as a 501 (c) (3) by the
Internal Revenue Service.
Such
organizations are public parks, non-profit schools, federal,
state or local governments, religions, as well as charities
like the
Boy Scouts and
United Negro College Fund.
3.
The organizations should sign a certificate for an IRS tax
exemption when you contribute.
4. You
can write off the “fair market value” (the amount the
item would sell for today) of used items like
clothing or cars. See IRS Publication 526's section on fair market value or
call 800-TAX-FORM.
You’d
use “Blue Book” values for cars
in most cases.
|
|
|
5.
You can’t write off contributions to political
groups or
candidates, labor unions, foreign charities,
sports and social clubs, or tuitions, among other things.
For
more information and to download Publication 78, go to the
IRS website.
There
are about 360,000 new charities starting each year, and
unfortunately many are scams.
Some
use names like familiar charities.
For example, the American Cancer Aid Foundation sounds a lot like The
American Cancer Society, which raises almost $1
billion a year and has excellent ratings with the Better
Business Bureau (BBB).
In contrast, the American Cancer Aid Society has
never filed a report with the BBB and has no tax status.
As a general rule, never give to a charity over the phone, especially by credit card number.
Instead ask the phone solicitor to mail you printed information so you can check them out.
All
sorts of groups are advertising for your unwanted old car
or truck.
|
Before
you hand over the keys, make certain you know who you’re
dealing with, otherwise you may end up giving it to a
charity that doesn’t get much benefit.
Most charities sell the vehicles at auction, but
others use a middleman to sell them who ends up with most
of the profit.
While
some groups want money, household items or food, consider
donating your time,
too.
There are lots of volunteer opportunities to choose from
and you can find out about them by logging on to
VolunteerMatch.
To
check out a charity, go to the BBB’s
Wise Giving Alliance website. They also check to
make sure the organization effectively uses the funds it
gets.
The Charity Navigator rates thousands of charities from one to
four stars.
GuideStar
lets you verify a nonprofit's legitimacy, learn whether a
contribution will be tax deductible, view a nonprofit's
recent Form 990, or find out more about its mission,
programs and finances.
For
complete information on how to detect charity scams and
where to report them, go to the FTC site or call toll-free 1-877-FTC-HELP (1-877-382-4357).
See what you learned.
Check out
"Thieves Want Your Number: Avoiding Identity
Theft" |
|
|
Did this answer your question?