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How to Donate Your Money Sensibly

When finances are tight, it can be hard to designate some cash to give away. But even the Grinch-iest and Scrooge-iest among us can be moved to donate during the holiday season. In fact, the Tuesday after Black Friday was recently called “Giving Tuesday” to get everyone in the spirit.

Whether you plan to toss some change in a bell ringer’s kettle or donate a sizable percentage of your income this holiday season, be smart about your charitable donations. Before your Grinch heart grows three sizes and you’re ready to carve into the roast beast, do your research: What does a charity need most? Which charity should you choose?

We’ve got you covered. Consider the following when you’re ready to dig into your most generous pocket:

1. Pick a charity you’ll feel dedicated to. To avoid feeling overwhelmed by choices, make your gift personal. Maybe you have something to feel especially thankful for this year — your health, a new baby, or a promotion at work. If you can tie your donation to a personal experience or memory, it narrows your options and can make you feel more connected to your gift. Alternately, consider local organizations: you may see the effects of your donation more directly.

2. Try to write a check. It can be tempting to make your donation through a social media site, by text, or in another novel way. But  those tools cost the charity — and that money is taken away from its core mission. Even donating by credit card costs the organization, so the most efficient way to donate is to simply write a check. 

3. Make sure taxes are in order. Most donations to a qualifying nonprofit are fully tax deductible. There is an exception, however, if you receive goods or services in exchange for your gift. For this reason, in the event of an IRS audit, your bank account or credit card statement showing the donation isn’t enough to prove the donation — you’ll need a written receipt from the charity showing your donation amount and stating that you did not receive anything in exchange.

4. Ask an organization what it needs most. This seems obvious, but not every organization needs canned goods or the clothes you just cleaned out of your daughter’s closet. In fact, it might create more work and inefficiency for the organization if you drop those items off. In many cases, they would probably prefer a monetary donation. In others, maybe they’re short-handed and could really use your time. If that’s what they say, listen! And hey, volunteering could be a heart-warming (and free!) family holiday activity.

5. Avoid spam. There’s nothing worse than getting barraged with emails from an organization you once supported. In order to avoid that “no good deed goes unpunished” syndrome, follow a few ideas to stay spam-free. For example, read an organization’s privacy policy before you donate and hand over your email address. Some organizations sell email addresses, leaving you open to a lot of “charity spam”. You may be able to unsubscribe or opt out of having your address on a list … which can be a very good thing. Don’t just sign up blindly. And finally, you may want to limit yourself to a larger donation to one charity instead of several small donations to various ones. At least you won’t be spreading your email address too thin, which can also help avoid spam.

Try out these simple steps before signing away the big bucks this holiday season. You don’t want to ruin the lovely feeling of giving by having a Scrooge reaction to spam or taxes.

Do you have a favorite charity that handles donations especially well? What do they do right?

Published or updated on December 11, 2012

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About Maria LaMagna

Maria LaMagna is a recent graduate of Northwestern University where she served as editor-in-chief of the university’s award-winning daily newspaper and studied for five months in Argentina. Before joining Money Under 30, Maria worked as a reporter for CNN and the Indianapolis Business Journal. Follow Maria on Twitter @MCLaMagna.


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  1. Even though my husband and I are in debt repayment mode, we still want to give to causes that we support–especially during the holiday season. This time of year, we give to Toys for Tots or the Salvation Army Angels program. The former is a general gift program, while the second allows you to select gifts for a specific child. We often give to charity programs through our employer. We also try to give to local organizations, which are often an afterthought for many people, who tend to focus on giving at the national/international level.

    The hardest part is that it can be difficult to say no to an organization that holds a special place in your heart. My undergraduate alma mater is a small regional college, one that doesn’t yet have a lot of wealthy donors. They rarely contact me seeking funding, so when I do receive a letter asking for a donation to a scholarship fund or to help restore a beloved campus landmark, I’m inclined to say “yes” and pull out my checkbook. I think one of the best ways to handle charitable giving is make it part of your budget–to set aside a certain amount per month or per holiday season–and then select how much you’ll give to each cause. Someday, I hope to be able to give a lot more in support of the arts and higher education–both causes near and dear to my heart.

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