The altruistic among us say that charity is about giving back, that the giver should only be getting warm fuzzies from helping others in need. Nobody gives to charity for selfish reasons.
Unless someone anonymously donates every spare cent—and if that someone is you, well, hats off—you’re probably getting at least something out of your donations. But all cynicism aside, it’s never been easier to do good while also getting something out of it. So, in honor of #GivingTuesday, here are some of our simple ways to double dip—that is, to pay it forward and benefit in the process.
Write it off
Charitable giving is one of the easiest ways to lower your taxable income every year. What you may not know is you can write off both cash and non-cash donations. So, even if you’re not throwing down a fat check for your favorite charity, you can potentially write off (very) gently used items, and even the ever-popular vehicle donation. The IRS has a few tips on how to make sure your deductions are legal, but here are some very important points to remember (and as with anything tax-related, make sure you consult a qualified tax professional, too):
- The government only allows you to deduct contributions to certain organizations. Donations to political candidates and groups, as well as specific individuals, are not deductible. Make sure contributions are deductible before donating, and don’t try to write off non-deductible contributions. Unless, you know, you love getting audited.
- When donating goods and services, the deductible amount is what’s known as the fair market value. That term may sound a bit vague, but basically it means that you can’t get a tax receipt for $100 for something a reasonable person would only buy for $10.
- Donations over certain amounts require additional documentation. Make sure you get what you need in writing when you make the donation, and put it away until you’re ready to file your taxes. It will save you a lot of stress later on.
Did you know that many museums, zoos, and other cultural facilities across the state allow you to deduct the price of your membership (up to $75)? That means you can visit as often as you like and deduct a nice chunk of change. Additionally, memberships can be great for things like:
- Free parking
- Gift shop discounts
- Exclusive events
All of which happen to be allowed under IRS rules for charitable contributions without triggering additional value that might limit your deduction.
Did you want a sweet car window decal to show off your support for, say, Colorado Public Radio (so do we, let us know when you find one)? Maybe you’re after a snazzy hat or shirt instead? All of these goodies are considered “token items” by the IRS, and don’t require additional disclosure or documentation as part of your tax return. Becoming a member or giving a certain amount during a pledge drive can have fringe benefits.
Conversely, keep in mind that the Vail trip you won at a charity auction, or the sold-out CU vs. CSU tickets you had the right to buy by donating to be a Forever Buff, do not have the same kind of no-strings-attached value for tax purposes. According to the IRS, for those sports tickets, you’re limited to deducting 80% of the donation. In the case of the ski trip, if the amount you paid was considered fair market value, you can’t deduct any of the cost.
But just because you can’t write some or all of it off doesn’t mean you should avoid charity events altogether. All kinds of great experiences are available, and the charity benefits because the auction items are typically donated by other philanthropically-minded folks.
So you’re not exactly selfless—that’s OK! If charities had to rely solely on those who gave with absolutely no return benefit, they’d probably be pretty deep in the red. Nonprofits accept the selfishness of human nature, and so should you. Because in the end, everyone wins—especially the cause you’re trying to help with your donation.
Have you ever benefited from giving to charity? Leave your experiences in the comments.