In 2014, the U.S. government allocated over $32 billion for economic assistance to other countries. In 2016, Americans gave over $389 billion to charitable causes, a 4.2% increase from 2015. Corporate giving was over $18 billion, a 3.5% increase and Foundation giving was over $58 billion, an increase of 3.5% as well.
It’s difficult to pinpoint the exact amount raised for disaster relief over the past several months, but estimates suggest it’s over $150,000,000.
Bottom line: Americans give.
If you’re like me, you want to help, but don’t want to give to an organization that’s inefficient, ineffective, or worst case, fraudulent. For example, after the 2010 earthquake in Haiti, NPR reported the Red Cross spent over a quarter of the money raised– $125 Million – on internal expenses. So, what can you do to have the greatest impact, while at the same time vet the organization you’re donating to?
Consider these four things according to the New York Times:
- Sending money is almost always best—Transporting, storing and sorting goods can divert resources from more pressing work.
- Pick the issue with your heart and the organization with your head.
- Do your research before you give—organizations like Charity Navigator can help you to vet charitable organizations.
- Follow up because recovery takes a long time—if you’re donating to disaster relief, keep in mind that donations surge in the immediate aftermath, but recovery takes place over a much longer timeline.
What should you know about charitable donations and your taxes?
- Check that the organization you donate to is a tax-exempt 501(c)(3) organization by using the IRS’sonline tool.
- Charitable contributions of money or property can be deducted if you do not receive anything in return—otherwise, the value of what was received must be subtracted from the contribution for deduction purposes.
- Example: a $50 cash donation to a tax-exempt organization would qualify for a full tax deduction if you receive nothing in return.
- Example: if you purchase a ticket to a charity’s gala for $250 and the value of the meal and entertainment is worth $100, then you can only deduct $150.
- Donations of material goods can be deducted for the fair market value or the price the property would sell at in the open market on the date of the contribution.
- Use the Charity Navigator giving calculator for more scenarios
- You can also utilize BankRate’s Tool here.