{"id":3307,"date":"2020-11-30T19:01:05","date_gmt":"2020-11-30T19:01:05","guid":{"rendered":"http:\/\/tisbestorg.flywheelsites.com\/blog\/?p=3307"},"modified":"2021-07-01T13:50:46","modified_gmt":"2021-07-01T20:50:46","slug":"giving-tuesday-5-questions-to-ask-before-donating","status":"publish","type":"post","link":"https:\/\/www.tisbest.org\/posts\/giving-tuesday-5-questions-to-ask-before-donating\/","title":{"rendered":"Giving Tuesday: 5 Questions to Ask Before Donating"},"content":{"rendered":"

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With Giving Tuesday occurring this week, did you know that there are 1.6 million tax-exempt organizations in the United States<\/span>?<\/span>
\nThat number represents <\/span>a lot <\/span><\/i>of people striving to create a better world. From <\/span>Civil Rights charities<\/span><\/a>, organizations that help the <\/span>homeless population<\/span><\/a>, <\/span>faith-based nonprofits<\/span><\/a>, <\/span>environmental initiatives<\/span><\/a>, and more, there is no shortage of 501(c)(3) nonprofits to which Americans can donate their money and time.\u00a0<\/span>
\nIn fact, Americans wrote off $449.64 billion in charitable donations in 2019.<\/span> Wow!\u00a0<\/span><\/p>\n

Where Are You Donating This Giving Tuesday?<\/span><\/h2>\n

With <\/span>Giving Tuesday and the end of the year approaching quickly<\/b>, you\u2019re likely considering a charitable donation toward an organization you care about. Or, perhaps you\u2019re new to charitable giving and hoping to discover which nonprofits best reflect your individual moral compass.<\/span>
\nWith so many options in the United States, it\u2019s wise to <\/span>ask several important questions before donating money to a charitable organization<\/b>.<\/span>
\nIf you need help deciding where to donate, TisBest is here to help with some decision criteria.<\/span><\/p>\n

1. How Far Will My Giving Tuesday Dollar Go?<\/span><\/h3>\n

Healthy charities demonstrate transparency. You should be able to find information on an organization\u2019s website regarding all costs and financials from each fiscal year. If you can\u2019t find it online, <\/span>ask for it.<\/b>
\nKeep in mind that all nonprofit organizations have overhead costs. This may include salaries for employees, rent and insurance on office space, and more. That being said, the charity you donate to hopefully strives to <\/span>keep their overhead costs low<\/b> in order to spend more funds on their cause.<\/span>
\nBefore donating, find out <\/span>how far your dollar will go<\/b> by researching or asking what percent of each dollar goes toward overhead costs. Organizations that have more financial efficiency and sustainability are more likely to achieve their mission in the long run.\u00a0<\/span><\/p>\n

2. Can My Giving Tuesday Donation be a Tax Deduction, and Does That Matter to Me?<\/span><\/h3>\n

There are lots of tax exempt charities out there, as we mentioned above. But let’s unpack the deductible type versus organizations to which donations do not qualify for tax deductions. How the organization is registered with the IRS and whether a donation can possibly result in a tax write-off are separate questions from whether your individual taxes will benefit<\/strong> from the donation. Here is a <\/span>great breakdown<\/span><\/a>\u00a0on what deduction level it takes to itemize. <\/strong>Bottom line:\u00a0even if the charity qualifies as deductible, everyone doesn’t benefit from writing off their charitable donations.<\/span><\/p>\n

\u201cGiving Tuesday\u201d does not have to mean \u201cTax-deductible Tuesday\u201d<\/span><\/h4>\n

When it comes to charitable donations qualifying for deductions, often this tax deductible designation is used as a litmus test for whether a charity is legitimate. And most of the charity listings on the internet will rely on the IRS 501c3 designation to source their list. There are a handful of reasons why some legitimate nonprofits are not included.\u00a0<\/span>
\nFor example, there are younger or smaller charities out there with lower overhead \u2014 think \u201cstartup scrappy\u201d \u2014 which may be very <\/span>impactful but simply do not have 501c3 status yet<\/b>. In fact, when the IRS was restructured in 2017 it caused long delays for even those nonprofits that had filed for their federal status.\u00a0<\/span>
\nIn other cases, entirely legitimate, <\/span>tax exempt<\/b> charity organizations could have <\/span>different IRS designation types<\/span><\/a> like a 501c4, which indicates the donation is <\/span>not deductible<\/b>. There are over 150,000 501c4 nonprofits that often strive to bring systemic impact on a major issue you care about through political channels like lobbying.\u00a0<\/span><\/p>\n

Helpful Resources for Charitable Tax Deductions<\/span><\/h4>\n

However, if you are considering this donation part of your annual income tax strategy, you should confirm before donating whether or not donations to an organization are tax deductible. If you aren\u2019t sure, check the charity\u2019s website for its Employer Identification Number (EIN) number and look it up on <\/span>Charity Navigator<\/span><\/a> to confirm the status.<\/span>
\nAnd oftentimes, major nonprofit organizations will have separate arms or funds that are not 501c3. That\u2019s also something to be aware of as you make your donation. Charity Navigator has compiled an additional list of considerations regarding the tax benefits of giving <\/span>here<\/span><\/a>.<\/span><\/p>\n

3. What is the Underlying Issue and Does the Charity\u2019s Mission Address it?<\/span><\/h3>\n

Most, if not all, charities are well-intentioned.\u00a0<\/span>
\nHowever, as explained in the book <\/span>When Helping Hurts: How to Alleviate Poverty Without Hurting the Poor and Yourself<\/span><\/i> by Steve Corbett and Brian Fikkert, many charities do more harm than good by <\/span>failing to consider the complexities of the larger issue<\/b> in their efforts.\u00a0<\/span>
\nA tangible example of good intentions actually hurting a local economy is told in the story of a Rwandan egg farmer who relied on his daily egg sales for income. When a well-meaning American church began sending free eggs to the community, the farmer was <\/span>no longer able to make a living<\/b>. The demand for his supply had disappeared overnight.\u00a0<\/span>
\nLikewise, the Netflix film <\/span>Poverty, Inc<\/span><\/i><\/a>. <\/span><\/i>examines problems within the multibillion-dollar poverty industry and urges viewers to ask how they may be part of the problem. It talks about having a mind for the poor versus just having a heart for the poor. Check out the <\/span>trailer<\/span><\/a> for this documentary.<\/span>
\nWith regards to complex foreign issues in particular, novelist Teju Cole eloquently personifies this controversial sentiment in a <\/span>2012 Atlantic article<\/span><\/a>:\u00a0<\/span><\/p>\n

\u201cHis good heart does not always allow him to think constellationally. He does not connect the dots or see the patterns of power behind the isolated “disasters.” All he sees are hungry mouths, and he, in his own advocacy-by-journalism way, is putting food in those mouths as fast as he can. All he sees is need, and he sees no need to reason out the need for the need.\u201d<\/span><\/p>\n

Diligence is the Key<\/span><\/h4>\n

But many charities truly do strive to improve systemic issues, empower people, and help them recognize their inherent dignity. This is why donors must critically examine the effect of a nonprofit\u2019s work in a community. Supporting an organization certainly feels good \u2014 but the <\/span>impact always extends far beyond<\/b> that feeling. <\/span>Dig in and do the research.<\/b> Make sure the organization\u2019s mission is one you believe in. As Cole puts it, \u201dIf we are going to interfere in the lives of others, a little due diligence is a minimum requirement.\u201d<\/span><\/p>\n

4. What Are This Charity\u2019s Accomplishments and Long-term Goals?<\/span><\/h3>\n

Before making a contribution, find out what milestones the nonprofit in question has already reached in its mission and what long-lasting impact it plans to make in the world. <\/span>Questions to ask may include<\/b>:<\/span><\/p>\n