The Season of Generosity

One of my favorite pre-holiday meetings involves gathering the kids together to discuss our holiday plans. In our household, it’s inevitable that kids will find that perfect moment of cute childhood brilliance to break out their Christmas wish list at a moment when they are polite and well-behaved. In the spirit of giving to others, my wife and I encourage them to also create a wish list for things they would like to give to others in need. Before you start donating online or breaking out those checkbooks, let’s review the basics of why, when, who and how.

Always focus on why you are donating money in the first place. The ultimate motivation of any charitable gift should always be that you support the mission of that particular charity. An added benefit is the tax savings that come with that gift.

Determine who will benefit the most from your generosity. This is really the most important question of all of them. Who has a mission closely allied with your own beliefs and values? Are they responsible with the money that they receive? Where do I want my money to be used? Several of these questions you can answer for yourself but sometimes you may need to find more information. You can research charitable organizations using the following resources:

http://www.guidestar.org/

http://www.irs.gov/Charities-&-Non-Profits/Exempt-Organizations-Select-Checkhttp://www.charitywatch.org/articles/online_giving.html

Identify how you want to make your charitable donation. One option is to simply write a check. If your donation is $250 or more, you will need a receipt from the charity. Give online with your debit card, credit card or a service such as PayPal. If you give cash, you must get a receipt. An often overlooked strategy is to donate appreciated shares of stocks or mutual funds instead of cash since you can deduct the full value of the donated securities.

Know when to make your donation in time for a 2014 tax deduction. If you mail a check, it must be postmarked on December 31st or earlier. If you pay by credit card, the transaction must be processed by 12/31 so give yourself about 3 extra days. With more complex methods, you should try to initiate the transaction by no later than December 15th.

Now you know how to make your charitable giving wish list and check it twice. With these guidelines, you can enjoy the benefits of playing Santa Claus both now and when you file your income taxes. Have a happy holiday season!

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