People give contributions to charity for three likely reasons:
- Charitable gifts are tax deductible. People benefit from helping others through charitable deductions.
- Giving is believed to have a therapeutic effect, especially for retired and elderly people. Apparently there is a certain kind of “high” or an unexplainable joy that is bestowed on the person who gives and helps others in need.
- For religious people, making charitable contributions is an act of faith and a form of service to God and the church.
But much as you would want to share, you should exercise some care when you dole out donations either in cash or in kind to make sure your act of generosity does not result in naught. While you want to share your blessings with more people, you should have a well-laid plan in allotting your contributions to different charitable institutions.
The following guidelines may be of help as you prepare to give your charitable contributions:
- Pick a charitable institution that has a wide reach of beneficiaries. The more beneficiaries they serve, the more donations they need. Moreover, make certain that the institution as well as its mission and goal are legitimate, acknowledged and qualified for tax deductions.
- Once you have picked the groups you want to support, do background research to gather more information about them. Learn how and where the donations are going and being used.
- Don’t try to support as many organizations as you want. One, two and at the most three, are the ideal numbers. If you maintain assistance to more than three institutions, there could be some confusion in tax deductions, and you will also have a difficult time keeping track of your donation records. On the other hand, if you can’t avoid helping more charitable institutions, you should hire a professional to help you come up with a systematic way of recording your donations.
- Ask those who regularly give you gifts on occasions such as Christmas and birthdays to make donations in your name to your favored charitable institutions instead of sending you gifts on said events. Sometimes gifts just add clutter around the house, hence it is more practical if you ask for donations from your well wishers. With this act too, you will be setting a good example to them, and before you know it they will be motivated to give as well.
- Decide how much you are going to donate in a year. Even Bill Gates sets a limit to his charitable contributions. You can give as much as you can depending on your resources, but clearly you can’t give more than what you have.
- If you opt to donate in kind, you should know the worth of your donation. For instance, if you will donate clothing, find out first the average value or amount of your donation. This is very important, because your tax deductions will be based on the assessed worth of your gifts.
Though we are going through an economic global crisis, it will not hurt us at all if we give whatever little donation we can afford to charity. After all, if all of us will only pool our resources together, there will not be a hungry soul in this world.