The world needs philanthropists now more than ever. Fortunately, more people are looking to donate than ever before. According to Fidelity Charitable, around two-thirds of American donors want to do more.
There are a few things one must do to be an effective philanthropist. There are tricks out there to stretch your donations as far as possible. Additionally, there are things to be known in regards to tax benefits.
First and foremost, a philanthropist should get in the habit of planning. That includes writing lists. NewsMax has these four pieces of advice for budding philanthropists: write down your values (access what is most important to you). Write down your long-term as well as short-term goals. When spending, do so with intention. And finally, allow your values to define your spending. You don’t want to pay for something you don’t support, so make sure your money goes where it feels the most important.
Become An Informed Giver
If philanthropy is your calling, one thing you’re going to have to get skilled at is researching the organizations you plan to aid. It’s best to understand the charitable organizations you plan on funding.
This means that it is okay to research ahead of time. Likewise, it’s okay to ask questions, regardless of how many cross your mind. Forming a relationship with an individual inside the organization is a great way to learn more about the inside processes.
Giving locally allows a philanthropist to invest in their community. It comes back around to that longstanding belief that you can only get what you give. To get a flourishing community, one must first put into it.
Additionally, donating local keeps money flowing within your community. It isn’t going to be squandered on any higher-ups of a national corporation – it’s going to go directly to those that need it.
Philanthropists should learn how to keep records of donations. There are guidelines to follow if one wants to use these donations towards their taxes. Forbes has a whole article on keeping track available for those that need a jump start on the process.
When tracking cash donations, be sure to note the charity’s name, amount, and date. These can be recorded by a bank record or bank statement for smaller sums (under $250). For more considerable sums, the charity will have to provide a written statement or acknowledgment. It isn’t uncommon for charities to provide receipts in response to donations.
Non-cash items are slightly more challenging to keep track of – but still possible. The value of those items will need to be noted, for starters. For items worth up to $250, a receipt or letter will work just fine. For the next tier, an acknowledgment will be required. For items over $5000, the item will first need to be appraised.
Hire a Professional Advisor
Hiring a financial advisor is never a bad call, especially for philanthropists. They will know the proper way to set up a donation, including whether an item needs to be assessed beforehand. Likewise, they can provide aid in record-keeping and advice on when to include it for tax purposes.
Corporate Social Responsibility
Corporate Social Responsibility (CSR) is a business model that many businesses hold – it is the belief that they must be held socially responsible. In other words, companies large and small feel compelled to find ways to give back to the community, either by encouraging employee volunteerism or by direct donations.
When it comes to donations, a company has more opportunities than an individual. Likewise, they have more responsibility to ensure that the money is going where it needs to go. Financial advisors should be involved, and thorough vetting of all non-profit organizations should be the first step.