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It's the
season for giving. Especially to charities.
Whether
it's a door-to-door solicitor, the bell-ringer outside
the shopping center or the charity envelopes arriving in
your mailbox, everyone, it seems, could use a little
holiday cheer.
And
despite the financial hardships that have plagued so
many families, a majority of American consumers are in a
charitable mood, according to a recent survey by
American Express
, which found 69 percent plan to do as much — or more
— charity giving this year compared with last year,
even while cutting back on gifts to family and friends.
"People
are ... cautious about giving money away," said
Dan Schrauth
, a wealth adviser with
J.P. Morgan Private Bank
in
San Francisco
.
During
the economy's boom years, he said, many individuals
needed year-end charitable deductions. This year, with
lagging investments and pinched paychecks, donations are
less likely to be tax-motivated.
"People
realize that during challenging economic times,
charitable organizations need contributions more than
ever," said Schrauth. "Today, it's purely
altruistic, which is nice."
And all
those good causes can use your help. Charitable giving
— at
$308 billion
in 2008 — was down 2 percent from the previous year,
the first decline since 1987, according to the
Illinois
-based
GivingUSA Foundation
, which tracks charitable spending nationally.
If you're
motivated to give to charities this holiday season, here
are some tips:
CONSIDER
A CARD
Charity
gift cards let you — or your recipient — choose
where to donate, from African wildlife to Appalachian
trails. Among groups dispensing such cards are
TisBest.org, JustGive.org and GlobalGiving.org.
TisBest,
a
Seattle
-based nonprofit that creates custom-designed gift cards
for individuals and companies, says its business has
tripled to nearly 30,000 cards sold this year since it
launched in 2007.
Instead
of sending a note saying, "I've made a donation to
my favorite charity in your name," you send friends
or family a personalized gift card for a specific
amount, anywhere from
$10 to $5,000
. The recipient then "shops" online, choosing
a charity from among some 250 on TisBest's site.
"We're
a way to turn a charitable donation into a great gift.
It shows respect to the recipient because they have a
choice where to give," said TisBest founder
Erik Marks
, who said the average card amount is
$37
.
Another
site, DonorsChoose.org, connects you with teachers whose
classrooms need everything from math flashcards to
overhead projectors. You pick the school, the project
and the amount you want to donate.
WATCH OUT
FOR FRAUD
Not
everyone's intentions are charitable during the
holidays, when phony solicitations can pop up online, at
your door or in your mailbox.
Don't
feel pressured to donate and do confirm that the
charitable group is legitimate.
Web sites
like CharityNavigator.org or the
Wise Giving Alliance
, sponsored by the
Better Business Bureau
at www.bbb.org/us/charity,
let you investigate charities based on their financial
and organizational health.
If you're
online, be aware that phony e-mail addresses from
pseudo-charities are prevalent. They often look like
legitimate sites, but may contain a Web address that's
one or two letters different.
In
reality, warns
McAfee Inc.
, a
Santa Clara
-based computer security firm, "they are fake Web
sites designed to steal donations, credit card
information and the identities of donors."
To avoid
them, don't click on any links in a charitable pitch
sent by e-mail; always type in the exact Web address
yourself.
INVOLVE
THE KIDS
It's
never too early to get your kids, whether they're
toddlers or teens, thinking charitably.
KidNexions
co-founder
Karyn Hodgens
, who teaches personal finance classes for kids in
Sacramento
-area schools, recommends holding a family chat to
involve kids in choosing how and where they want to
donate.
Younger
kids can give canned goods. Older kids and teens can do
their own research online and report back to the family.
Above
all, the chosen charity should reflect their interests,
and kids may need help with ideas, said Hodgens. If they
like animals, suggest the SPCA or a local animal
shelter; if they're into sports, find a local program
that needs new basketballs or other kids' sports
equipment.
Twice a
year, Hodgens and her husband huddle with their two
teenage sons to select donations.
"We
let them decide how much they want to donate — usually
it's between
$20 and $40
— and then we match it."
This
year, for instance, her 14-year-old son Ryan chose to
donate
$40
to buy goats for a needy family overseas through
Heifer International
.
Parents
should always match their kids' donation, Hodgens said,
whether it's dollar-for-dollar or
"can-for-can," if it's a canned food donation.
"Learning
how to give is a huge part of money management,"
said the
Rocklin
-based financial teacher. "It's a life skill."
MORE THAN
A CHECK
There's
nothing wrong with writing a check to your favorite
charity. But there are alternatives, such as IRA
donations and charitable gift accounts.
For those
with a chunk to invest,
Kevin Rose
, a
Charles Schwab
branch manager in
Roseville, Calif.
, said charitable gift accounts let donors set aside a
single tax-deductible amount (minimum
$5,000
) that earns tax-deferred interest. At any time in the
future, the donors can dole out individual gifts, as
little as
$100
, to any public charity.
And if
you're older than 70 1/2, you can make a tax-deductible
donation to a charity directly from your IRA, using that
amount as part of your annual mandatory withdrawal.
Always
check to see if your employer offers dollar-for-dollar
matching contributions to your charity.
But even
if you can't financially afford to give this year,
"it's never too late to start saving," said
Rose. "If you want to make a sizable donation down
the road, you can build toward that" by setting
aside some savings now.
KEEP A
RECORD
For
IRS
tax purposes, a canceled check or bank statement is
usually sufficient when you donate money or property
less than
$250
. For larger donations, you'll need a dated receipt or
letter from the charity confirming your donation.
Also, if
you donate via a charity event, your tax deduction is
reduced by the fair market value of any meal, gift or
other benefit you receive.
For more
details on
IRS
tax-deduction guidelines, go to www.irs.gov
(search for Publication 1771).
And
finally, don't overlook another valuable donation to
your favorite charity: your time.
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