The holidays are the time of year when the spirit of giving touches us in a variety of ways. Among other things, we tend to step up our contributions to favored charities. Giving back to causes and organizations that have special meaning is probably the main reason for your philanthropic efforts. There's also the added incentive of claiming a deduction on your next tax return, provided that gifts to qualified charities are made by December 31.
Additionally, nonprofits are counting on generosity from people at this time of year. This is the season when they tend to collect a significant percentage of the total contributions they're able to attract over the course of the year.
As you consider the wide range of opportunities you have to give back, here are five suggestions on how to make the most of your charitable intentions:
1. Give where your money has the most impact:
You want to know that the charity you are benefiting puts the money to good use. All nonprofit organizations will have a certain amount of overhead costs. How confident do you feel about how the organization spends the money it raises? And how can you find out what charities spend on expenses like administration and fundraising? Many charities may spell it out directly on their website or in an annual report. Researching this can help you determine if a nonprofit is garnering the maximum impact from your generosity.
2. Consider charities that are familiar to you:
You may have already established a pattern of giving to certain causes. The objectives of these organizations can be closely aligned to issues that are personal to you. If you are familiar with the work of the organization and its accomplishments, you are likely to feel more confident that your contributions are serving a worthwhile purpose. Still, be certain that you truly understand how effectively the organization is meeting its goals. It is easy to give to the same nonprofits out of habit without thinking twice. Conduct your own due diligence and ask questions of representatives of the organization in advance.
3. Do your own soul-searching about who deserves your money:
Consider your own views on what problems are important to solve in your community, your state, the country, or the world. Charitable contributions can be most fulfilling if your money is going to help resolve real challenges that you believe need to be addressed. Assess where your own passions lie and make a commitment to organizations that effectively address those issues.
4. Think outside of the box:
In the world of nonprofit organizations, it is often a case of the rich getting richer, whether it is a heavily endowed university foundation or a well-established organization that focuses on battling a specific medical condition. These may be good causes, but it is also worth exploring other options for your money. Most nonprofits are challenged by a lack of funding. As you set money aside for charities, consider some that have a solid track record but may not be as visible.
5. Dedicate your time:
Most nonprofits are likely to tell you that money is the most important gift they can receive, because it is what allows them to pursue their objectives. At the same time, many charities, particularly at the local level, can make good use of your skills and time. Consider setting aside a portion of each week or month to perform service work for worthy organizations.
The holidays may seem to be the most appropriate time to give, but it's important to think about the value of extending your generosity throughout the year. If you have identified quality organizations that are worthy of regular donations or your volunteer hours, consider giving on a regular basis. It can help charities better manage their own cash flow and volunteer needs, and that can ultimately result in a better return on your own charitable investment.
Rocco is a Private Wealth Advisor with Ameriprise Financial Services, Inc. in Southampton, NY. He specializes in fee-based financial planning and asset management strategies and has been in practice for over 20 years. Advisors is licensed/registered to do business with U.S. residents only in the states of NY, NJ, TX, MA, PA, NC, NH, UT, NV, CA, NM, WA, VT, MS, MD, RI, FL, MO, SC, GA, MN, CT, AZ. Ameriprise Financial Services Inc., and its representatives do not provide tax or legal advice. Consumers should consult with their tax advisor or attorney regarding their specific situation. Brokerage, investment and financial advisory services are made available through Ameriprise Financial Services, Inc. Member FINRA and SIPC. www.roccocarriero.com