Philanthropy: ’tis the Season

This is about taxes, sort of. It isn’t about the tax legislation, though it might be. It is however about taxes and giving.

Probably the most frequently asked question I dealt with during my non-profit career was, “How do I decide to whom to give money and how much?” It was usually followed, sometimes preceded by, ” I get so much mail asking me for money; it makes me crazy and I throw most of it away!”

Between now and the first week of January if one itemizes one’s taxes one is allowed to give tax deductible contributions to organizations that have applied for and received what are known as 501c3 status. They are non-profit organizations that fall into a fairly long list of eligible charitable work.

Charity, which comes from the Latin, caritas, “to care,” is a time honored concept in American life cemented into our ethics by the tax deductibility of the gift. None-the-less, at the drop of a disaster Americans are cleaning out closets, breaking piggy banks, shaking out pockets of trousers and never giving much of a thought about figuring it into their taxes.

Because of the tax laws, the last two months of the year is a madhouse for both organizations cranking out what they hope will be the appeal with the magic attached to it, as it is also madness for anyone who has a mailbox and has to lug in all that creative heart-sobbing material inside from it. The non-profit sector is the 5th largest sector of the American economy and Americans give away in 2016 approximately 360 billion of dollars a year. It really is pretty extraordinary. That’s no counting what comes out of the piggy banks and trouser pockets.

But the question becomes how to make some sense out of the process.  Do you just throw money up in the air and let folks fight over it? Some people do that. I guess they think its cute. Do you randomly walk the streets and hand people a few bucks? People all over the country do that in many forms. Some actually do exactly that. Some roll down their car windows and hand money to the needy on a street corner. Some don’t really have enough extra money to be giving away so they and their families spent hundreds or thousands of hours volunteering as meal servers, shelter helpers, delivery truck drivers, cooks, and clean up staff. Americans donate 7.6 billion volunteer hours a year which the Dept of Labor estimates comes to $178 billion in value–that’s over the $360 in cash.

But there are many who are fortunate enough to have extra money that they unselfishly can and do give to the less fortunate. But how to figure out who gets what? Here is way to maximize that good impulse. First, figure out how much there is to be given away. There is no sense to give away money when it puts you in debt or deprives your own from the essentials needed at home.

Then comes who to give it to. My mother in law G-d bless her, gives a dollar, or would if we let her, to every ask envelope she gets in the mail. The reality is all that does is get you permanently imprinted into a data base in the organization’s hope that there will be more later. In fact, a dollar is probably less than what it cost the organization to ask for it. Sad but true. For charities I don’t give to that have taken to sending a stamp or a coin as an incentive, I use my own stamp and send it back so at least they have a free shot at someone else.

For the next, it is best to think of those charities that have some relationship to you, the giver. Did your favorite aunt die of lung disease? Did you lose a parent to cancer? Did kidney disease steal someone you loved from you? This process will help you winnow the list down to a group of needy organizations that mean something to you.

Then there is that group that you have no relationship to but tug at your heartstrings. St. Jude’s or the Shriner’s Children’s hospitals, the Muscular Dystrophy Association, the Heart Association and so on.

Also look local. I’d make two suggestions. One is to find an organization that will give out your money for you–the Red Cross, the Community Chest/United Way, The Community Foundation. You can safely and securely sent them a check and know that it will be divided amongst those in need or be given in whatever percentage you prescribe to particular organizations they support.

Then over the year follow the news. See what local charities really do a bang up job at something, but are so small they don’t get much publicity and thus money. The local no-kill animal shelter. A group that uses horse riding as therapy for disabled children. A clinic that provides free dental care or pre-natal care. Again, you can’t pick them, all so try and find first the one’s that have particular meaning to you.

One more step. Once you have come up with a giving list you should do some research. There are organizations like Charity Navigator and many others that grade organizations on the use of their donations. One of the worst examples of stuff you can find out it about is telephone solicitor business, especially ones for police and fire associations. Almost 90% of the money raised goes to pay the organization raising the money. Only 10% goes to the actual charity. You’re deducting 100% from your taxes and giving 10%. If you knew that in advance would you still give?

There are standards about what percentage a non-profit should devote to fund raising. Standards for what percentage of the budget should go to salary and management vs. delivery of services. Some organizations don’t watch their money carefully. There is embezzlement and other shady stuff that goes on. Added up you can get a pretty good idea if your “favorites” are actually doing a good job managing their money. Charity Navigator actually grades the organizations they follow. Why give  a group money if they can not be trusted to handle your hard earned money well? You shouldn’t.

Now we get down to the mathematics. You have x number of dollars and y number of organizations.  You maybe partial to children, or animals, or combating a disease and might want to weight that group to give it a bit more than it’s proper mathematical share.

Finally comes the best and the worst of it. Writing the checks. The worst? It can take a lot of time and check-book entries with copies needed for taxes forms and so on. The best? You’ve done something to justify your place on earth.

Most every Sunday Bill Gralnick foists his opinions off on you. If you’d like more read his books:

“Mirth, Wind, and Ire”

“More Mirth, Wind, and Ire

open a free account prior to purchase; each book is the piddling amount of $2.99

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