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A Publication of WTVP

Americans reached out with heartfelt generosity last fall, donating about $1.4 billion to charity in the three months following September 11. Charitable contributions really make a difference to those in need, and following these tips may help you give more wisely.

Where do your donations go? 

Naturally, you want to select a legitimate charity that will use your donation responsibly. Several watchdog groups, including the Better Business Bureau Wise Giving Alliance (www.give.org) or the American Institute of Philanthropy (www.charitywatch.org), can help you check up on charities. Charitable organizations put some funds toward costs such as fund-raising and administrative expenses. By reviewing the charity’s annual reports and financial statements, you can discover how much money goes to the cause and how much to expenses.

Tax aspects of generosity 

You generally may deduct up to the full fair market value of your donations from your federally taxable income, subject to certain limitations. Charitable giving may reduce your taxable estate, as your donations may qualify for a federal gift or estate tax deduction.

Alternatives to outright gifts 

Consider a charitable trust or donor-advised fund. A charitable remainder trust pays you or your family yearly income for a certain term and donates remaining assets to charity. A charitable lead trust makes annual charitable gifts for a period of time and then pays remaining assets to your loved ones. A donor-advised fund offers a way to set up a charitable legacy. Some brokerage firms offer you the ability to contribute to a professionally managed account and then recommend grants to be made (anonymously or with recognition) to your favorite charities. You may also name a successor to continue the tradition of giving. IBI

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