It’s nearing the end of the year, which is the perfect time to donate to charity. Because of the tax changes starting in 2017 most taxpayers won’t be able to claim a deduction when donating to charity. This is because the standard deduction nearly doubled. When you filed your 2017 taxes you would have seen for the first time how the tax law impacted your taxes. Just because the financial incentive to donate to charity is gone doesn’t mean you should stop your donations! There are many incentives to donate to charity like knowing the impact you’re making in a cause that’s important to you.
How can you stretch your charity donation to go even further? Luckily, there are two ways to help your favorite charities more without you personally spending any extra.
- Donate during the charity donation match period
- Leverage your company’s charity donation match when you donate
Do both, and you’ll quadruple the impact of your donation!
Donating to Charity Statistics
The share of Americans who gave money to charity fell from about 68.5% in 2002 to 53.1% in 2016 according to the University of Michigan/IUPUI Lilly School of Philanthropy Panel Study. Additionally approximately 63 million Americans volunteered their time to make a difference according to Nonprofits Source.
The Urban-Brookings Tax Policy Center estimates that the recent tax cuts will shrink the number of households claiming an itemized deduction when they donate to charity from about 37 million to about 16 million in 2018. They estimate that overall, the tax cuts will reduce the marginal tax benefit of giving to charity by more than 30 percent in 2018, raising the after-tax cost of donating by about 7 percent. Unless people increase the amount of money they donate, charities will receive fewer donations and will bear the most of these changes.
Charity Donations Match Period
Many charities have a time of the year where generous donors offer to match all donations. For example, the Greater Chicago Food Bank tends to have this period every year leading up to the holidays. For every $25 you donate, Greater Chicago Food Bank will receive $50. This breaks down to $25 from you, and $25 from the donor that is matching donations. Giving Tuesday is the Tuesday after Thanksgiving in the United States. This day in particular likely has donors offering to match donations. Sometimes donors offer to match donations up to a certain amount and others offer to unlock a donation once donations hit a certain amount that day.
Company Charity Donation Match
Some companies also offer to match donations to your charity of choice, up to a certain amount. The company I work for is one of these companies. They make this entire process really easy, with a company portal that has almost all charities listed. I have yet to find a charity I want to donate to that isn’t in this portal. In the portal we select the charity, how much to donate and then confirm the company match. We receive a confirmation of our charity donation. This can then be used to deduct charity donations on our taxes.
If you work for a company that offers a company match and you donate during this time period your charity offers donation matches that charity will now receive quadruple the amount of money you donated. For every $25 you donate, the charity now receives $100. You’re able to quadruple your impact without having to quadruple your spending.
What Charities Should You Donate to?
Don’t know which charity to donate to? Do a little due diligence before you make a charity donation. Not every charity makes the best use of your donations. Certain charities spend more on administration than others for example. Luckily, there are resources to help guide you. Consumer Reports has a list of best and worst charities that will help you determine which charities should receive your donations.