is a first time for everything, including a first-time
donation to a charitable cause or organization.
holidays tend to bring requests from nonprofit
organizations for charitable gifts, but people who have
not donated to charities in the past may be unsure of
which ones to choose, how much to give, or how they will
benefit from giving money away.
Ebenezer Scrooge were alive today, he would do
charitable giving because he would understand the tax
benefits involved," said Robert Fragasso, chairman
and chief executive of Fragasso Financial Advisors in
Pittsburgh. "There are several ways to give, all of
which involve a potential tax deduction if you itemize
your tax return and meet some other criteria. That means
most middle class individuals and couples can gain a tax
gave $335.17 billion to charity in 2013, the latest year
data is available, according to Giving USA Foundation
and the Indiana University Lilly Family School of
has long been assumed that people make most of their
donations between Thanksgiving and New Year, but
researchers from the two organizations have found that
donors give only slightly more during that period than
they do the rest of the year. Half of donors in 2013
gave to the same charities at holiday time as they did
during the rest of the year, but 47 percent gave to
charities during the holidays they generally didnít
support at other times.
national organizations such as the Red Cross and
Salvation Army have name recognition, but donors may
want to consider a charity based in their region.
Chaney, vice president and a financial adviser at Fort
Pitt Capital Group in Green Tree, Pa., said a successful
giving experience relies on a donorís interest in
helping a charity ó both in supporting the cause and
the overall mission.
there are financial benefits to donating, this element
is always secondary," Chaney said. "Thatís
because the financial benefit you will receive is only a
portion of the dollars given.
most satisfying gifts are those given to causes that you
deeply value, since a charitable donation is ultimately
an investment in your values."
example, donors who love animals could choose to
contribute to an animal shelter.
next step is to determine how much to give.
believe that the amount should reflect the level of your
commitment," Chaney said. "If that commitment
is significant, make sure that the amount of your gift
does not jeopardize your financial goals. Sizable
donations should be discussed with both your tax and
financial adviser(s), who can ensure that the gift will
not upend financial obligations or objectives."
cash is welcome, donors may wish to consider giving a
highly appreciated asset, such as shares of publicly
traded companies. This approach offers three potential
benefits: avoiding capital gains tax, receiving a tax
deduction, and reducing company-specific risk in a
said that if a donor gives an appreciated security, that
person can save the tax that was due on the gain as well
as maintain the full ordinary income deduction of the
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I give $100 a week to my church. That would be $5,200 a
year," Fragasso said. "If I write a check each
week, I can potentially deduct $5,200 against my
suppose, by contrast, I have an appreciated security
that has a cost basis of half that amount. When I sell
it, now or later, I have to pay a 20 percent capital
gain tax on that gain.
gifting $5,200 of the appreciated security, I relieve
myself of the responsibility of paying that tax,"
he said. "The charity will sell it after it is
received and pay no tax as it is a tax-free entity. And
on top of saving the 20 percent capital gain tax, I
still get the same $5,200 tax deduction for making the