Corporate Philanthropy: How to Give
If your company does not have an established philanthropy division, worry not! Giving as a corporation is not so terribly different than giving as an individual. First, as you would from a personal perspective, find out who you could give to and the ways of doing so. To narrow down your choices, consider selecting a specific sector to which to donate. You might want to think about what your business does and where it is, and select charities whose mission is in line with your own goals. If your company makes any kind of detrimental impact on the community of which you are a part, you might consider donating to a charity whose efforts remedy such an impact. For example, if you have a lot of waste or environmental impact, you might want to give to an environmental charity.
If your company has skills or expertise that could be valuable to members of the local community, you could consider setting up an internship program for local kids. As a corporation, you might have surplus materials or supplies that you could donate to local charities or schools; or, you might want to designate a cash donation to be used to buy such capital improvements on the behalf of a charity. Your organization can also set up a gift-matching program, or something similar, so that your employees are encouraged to give to charities that they support, and your corporate exposure to a range of organizations increases.
*Think creatively, and develop a suite of giving opportunities. Your active involvement will help you build a mutually-beneficial relationship with the organizations and individuals in your community.
Smart Giving: Avoid Sending Cash
As tempting as it might be to put a $20 bill in the envelope you receive with a solicitation letter, take the time to write a check. Cash gifts are easily lost or stolen and not traceable.
*For security and tax record purposes, it is best to pay by check made payable to the beneficiary. Never make a check payable to a solicitor.
Smart Giving: Make Your Gift go Further Through Matching Programs
Want to make your donation double? Ask your employer whether they will match gifts.
Many employers match gifts made by their employees or will make grants to organizations recommended by employees. This is an easy way to direct more funds to the charities of your choice.
Use Due Diligence Before Donating
Aristotle said, "Giving away money is easy. Deciding whom to give it, how much, when and how, is not." Choosing among the many worthy causes can be a challenge and, unfortunately, the choice is made all the more difficult by organizations that are not necessarily on the up-and-up.
Sadly, there are many charity scams out there, to such a degree that the Federal Trade Commission (FTC) advises citizens to undertake due diligence and get as many facts as possible before donating. This research will help ensure that your donation dollars benefit the people and organizations you want to help, and doing such research is a good practice whether you are contacted by an organization's employees, volunteers or professional fund-raisers, and whether the solicitation for donations comes by phone, mail, the Internet or in person.
Smart Giving: Know the Facts on Tax
As with anything, there is more to charitable giving and tax deductions than meets the eye. Find out how much of your donation is really tax deductible. Be aware that if you receive a something in exchange for your gift (such as a book, a dinner, or some other 'prize') the amount of your tax deduction is reduced by the fair market value of the premium. For example, if you pay $600 for 2 tickets to the Superbowl (assume face value of $200 each) at a charity auction, you can only receive a tax deduction equal to $200.
*You can always turn down the incentive item if you wish to claim a deduction for the full amount of your gift - ask the receiving organization for more details.
Corporate Philanthropy
In the world of business, it is increasingly more challenging to do business in the community and not be a part of it. Good corporate citizenship includes giving business-sponsored donations. Corporate philanthropy helps companies increase their corporate profile and community goodwill, and corporations also benefit from the reinforcement of the common good that philanthropy fosters.
Funding from corporations is often in the form of larger gifts or grants, and can make a significant and positive impact on nonprofits' ability to advance their mission effectively. While many companies have a group dedicated to deciding to which causes to give, and how much, employees also have the opportunity to recommend charitable causes. Urge your company to get involved!
Donation Due Diligence: Get Advice
When considering making a donation, particularly a large one, or one of any size that will put a strain on your own finances, be sure to discuss the donation with a trusted family member or friend, or with a financial advisor, before committing the funds.
Some sophisticated but underhanded organizations can really have their acts together, and an objective perspective can be valuable in identifying the flaws in their pitch.
Try Your Charities on for Size
There are almost innumerable worthy charitable causes out there and you probably want to help a good number of them. For reasons of both time and money, however, you may find that you need to narrow down the organizations that you regularly support. You may have already identified your subset, but if you are still evolving your giving strategy, it is a good time to try on various charities for size.
Joining and/or supporting multiple organizations at a lower level for a year or two will give you the opportunity to interact with the organization, receive its newsletters and annual reports, and generally get a sense of how you and the charity get along. When you find the groups that both promote the causes you support and do so in a way that is comfortable for you, you can feel better about committing more of your time, money and advocacy to those causes.
Give Material Support or Your Time to Charity
Charitable organizations are nonprofit organizations; this means that the money they collect goes to operating the charity and supporting the programs and activities that fulfill its mission.
Most charities need money, material goods, and volunteers. While this breadth of needs can seem overwhelming for both nonprofit organizations and the people seeking to help them, it does provide innumerable opportunities for you, as a potential donor, to find the most appropriate way of contributing to a cause that you want to support.
Smart Giving: Get the Scoop!
You know the drill: the phone rings and it's your alma mater¡or the fire department¡or the organization that benefited when you sponsored your friend in the marathon last year. The person on the other end of the line wants to know what you'd like to donate this year. It's probably dinner time, but don't hang up just yet - that's a volunteer on the other end of the line, or at least an employee who has dedicated her career to nonprofit work. However, do not be afraid to ask questions!
Ask solicitors names and her relationships with the organization; if you are not familiar with the organization, ask what its mission is and how your donation will be used. Make your donation only when you feel comfortable that your dollars will be supporting an organization you know, believe in and trust.
Smart Giving: Shape-Shift Your Gifts
It's not all about writing a check. There can be significant benefits to using alternative forms of giving, such as planned giving (bequests), charitable trusts, gifts in kind, endowments and other creative gift mechanisms.
*Your tax advisor, accountant or attorney can help you make the best plan for you and your family.
Smart Giving: Time Your Gift to Best Tax Advantage
For many people, income can vary from year to year. Tax rates fall and rise in step with income fluctuations. Luckily, income tax savings from donations rise and fall as well. For example, imagine that you know your income will be substantially greater in 2006 than it is in 2005. If your tax rate is 28% in 2005, you expect a tax rate of 39.6% in 2006, your relative tax deduction on a $10,000 would be $2,800 for a gift made on or before December 31, 2005 and $3,960 for a gift made on or after January 1, 2006.
*If you are in the fortunate position to be making large donations and your income varies from year to year, plan to make large donations during the higher income years.
Smart Giving: Keep Track
To receive tax benefits when you make a donation, you must keep appropriate documentation. For monetary gifts of less than $250, a cashed check or receipt from the charitable organization is usually sufficient proof of contribution.
When donating property, establishing a trust or an annuity, it's time to call in professional advice¡ªtalk to your accountant. Also, many charitable organizations will provide you with support for whatever documentation you need for tax purposes.