Along with holiday festivities and gift shopping, many families also make the bulk of their charitable donations at year-end. If you find yourself making a flurry of last-minute contributions after the holidays, you’re not alone. Charity Navigator reports that on average, the charities listed on their website received about 40% of their annual donations from individuals at the end of 2012.
A June 2013 report issued by Giving USA demonstrates that charitable giving is important to both donors and charities. During 2012, charitable giving in the US totaled $316.23 billion, with individual giving accounting for $228.93 billion of the total amount given by corporations, individuals and non-profit groups.
If you’re feeling overwhelmed with holiday giving, these tips can help you reduce year-end financial stress and possibly increase the impact of your charitable donations.
Include charitable giving in your budget for the season. Allow a little extra for spontaneous cash donations to the red kettle, charitable donations at work and in your community. Don’t forget to plan for non-cash gifts such as toy drives for kids in need.
Determine which charities and causes are important to you and your family. Doing this as a family can provide a chance to learn the importance of holiday donations for younger family members.
Use your debit card to pay for donations. This provides a paper trail for budgeting and income tax deductions and doesn’t create or add to holiday debt.
Short on Cash? Donate Goods, Volunteer, and Seek Gift-Matching Programs
If your heart is full but your wallet is flat, there are other ways to make holiday donations. Contact your community food bank, schools, United Way, animal shelter, or social service organizations to learn how you can help. Local news media may feature charitable organizations seeking donations of goods and services during the holiday season.
Stretch Your Holiday Giving Dollars
Corporations, foundations and individuals may match your donations to eligible charitable organizations and non-profits. Many corporations offer matching gift programs and volunteer grant programs for employees. If your employer doesn’t offer these options, you may be able to participate in challenge grants issued by donors during charitable fundraising campaigns..
Enroll in employer sponsored matching gift programs: Matching gift programs offered by corporate employers can increase cash donations; check with your employer’s human resources department to determine if your company has a matching gift program. Double the Donation, a company that helps non-profits solicit matching gifts, notes a discrepancy between the number of employer-based matching gift programs and employee use of such programs. While 65 percent of Fortune 500 corporations offer matching gift programs, employee participation rates are much lower. This suggests that many employees may not be aware of matching gift programs offered by their employers.
Volunteer grant programs offer another way to increase your donation. 40 percentof corporate employers offer a volunteer grant program. Here’s how a volunteer grant program works. Employees volunteer for eligible charities including schools and 501(c) (3) non-profit organizations and the employer donates cash to the same charities based on employee volunteer hours completed up to a maximum established by the employer. Here’s an example: BigCorp offers to match employee volunteer hours at the rate of $10 per hour up to 200 hours. If an employee volunteers for 10 hours at an eligible organization, BigCorp would donate $100 to that charity.
Respond to a challenge grant: Organizational and individual donors usually offer challenge grants during fundraising events (think public media pledge drives) to help a charity or non-profit organization reach its funding goal. The donor of a challenge grant offers to match donations made within a specific time and up to a maximum amount.
Here’s an example. A pet supplies company offers to match donations to a local pet charity up to $2500 within two hours, which would increase the first $2500 in donations to $5000. If you donated $50 during the challenge grant period, your donation would be matched by the challenge grant donor and the benefit of your donation would increase to $100.
Challenge grants may be offered for a few minutes or may be available for a period of hours, days or weeks. Check with your favorite charities for year-end fundraising events and ask about challenge grants.
If you own a business and wish to issue a challenge grant, you could receive the benefit of free publicity when your challenge grant is announced or promoted.
Charities and organizations providing goods and services depend on donations all year. Instead of making all of your donations at year-end, consider scheduling automatic monthly donations. You tan register online for an organization’s monthly giving program and specify the amount of your monthly donation and the date you want it to be processed. Automatic giving throughout the year reduces budget pressures during the holidays and provides ongoing funding to your recipients. It’s easier on your budget to donate $50 a month than to pony up a one-time donation of $600 during or immediately after the holidays.
While these tips and suggestions are meant to simplify your holiday donations, your tax adviser or accountant can answer questions and help with designing a charitable giving program appropriate for your budget and interests.
Planning ahead for charitable giving can help with keeping your holiday budget from achieving critical mass. Try these tips for managing charitable giving and reducing that avalanche of bills that typically arrives in January.
Karen Lawson is a freelance writer who writes for LendingTree and other organizations. She relies on more than twenty years of work in the mortgage lending and loan servicing industries for producing informative articles, blogs and columns addressing topics related to mortgage loans and personal finance. Karen typically focuses her work on providing useful information for consumers about home loans, refinancing and personal financial matters.