December 14, 2005
Gifts to Charities, Helping Others - and Yourself
By Elizabeth Lazarowitz, Daily News Business Writer
Holidays got you in a giving mood? Make an addition to your gift list: a charity. With
hundreds of groups clamoring for a bit of your limited budget, though, you don't have to
be Scrooge to wonder, quot;What's in it for me?quot;
quot;The primary motivation to give really has to be a love of the work that the organization
does,quot; said Tony Martignetti, manager of Planned Giving Advisors, which helps
nonprofits raise funds. quot;But I think a close second is the tax benefit.quot;
If you're planning on itemizing deductions on your tax returns, including donations can
help offset your income tax. For someone in the 25% tax bracket, for example, a $100
donation to your favorite cause will cost just $75.
About 70% to 80% of Americans contribute annually to at least one charity, a report by
the Giving USA Foundation and the Center on Philanthropy at Indiana University
While you can't take your volunteered time as a deduction, you shouldn't forget to deduct
any costs you incurred while volunteering, such as mileage you put on your car.
If your donation will be a somewhat modest sum, you might want to give it to a smaller
organization in your community that may not have the flood of funds that better-known
groups often do.
quot;At a local homeless shelter, $15 can allow them to buy 15 boxes of macaroni and cheese
that actually goes to people who need help,quot; said Trent Stamp, president of charity
research group Charity Navigator.
Try to target one or two groups to avoid spreading your donations too thinly, Stamp said.
quot;It's important to diversify when you buy stocks, but if you do that when you donate, you
become inefficient and ineffective.quot;
A larger, consolidated donation also makes it less likely that a group will sell your
address to other organizations, which can result in an annoying avalanche in your mail
box of letters from groups seeking for money, Stamp said.
Don't forget that many employers will match their workers' donations, so if yours does, it
could double your gift.
Just because a group has quot;tax exemptquot; status doesn't mean donations are tax deductible.
To make sure you can write off a donation, check with your local IRS office or
If there's no extra cash in your budget, check around your house for items - a suit that no
longer fits, the guitar you never play anymore, your old computer - that you can donate to
a thrift shop. For tax purposes, you can estimate the value of the items yourself, or use a
tool like TurboTax's It's Deductible software. But remember that donations of goods
valued over $250 require a receipt.
Some groups accept gifts of stocks, so consider that if you have company shares that have
risen in value. Not only can you deduct the current value of the shares on your itemized
tax return, but you also won't have to pay a tax on the gain in the value of the stock, said
If you donate items that have risen in value, like your grandmother's collection of old
records, you can deduct their current market value, but only if the group can use them in
their charitable work (such as by teaching music) and if they keep them for at least two
years. Otherwise, you can only deduct the amount they originally cost, Martignetti said.
Car donations are a red flag for the IRS right now. You can only deduct the amount the
charity gets for the car, not the market value, and any gift valued above $5,000 now
requires a quot;qualified appraisal,quot; Martignetti added.
Even if you have nothing to give, you can buy holiday cards from charities that offer
them - a list that includes UNICEF, National Audubon Society, Children's Defense Fund
and Special Olympics - helps support those organizations. Instead of getting your animal-
loving friend another Dog-of-the-Month calendar, make a donation in their name to a
local animal shelter. Web sites like justgive.org and networkforgood.org offer quot;charity
gift basketsquot; based on a number of themes.