CHARITABLE CONTRIBUTIONS VOCAB Charitable Giving – the act of giving to charitable organizations or those in need Costs/Benefits Analysis – a tool used to choose among alternatives involving weighing the costs of a product or service against the benefit it will provide Gifts in-kind – a non-cash contribution to a charitable organization which can be given a cash value Nonprofit Organization – a legal organization providing services or activities without commercial or monetary gain; organized for purposes other than earning a profit Tax deduction – an expense that a taxpayer can subtract from taxable income CHARITABLE CONTRIBUTIONS Come in all sizes and types, from people of all income levels. It is rather simple; you can give something of value to an organization that provides services to other people for little or no cost or you may decide to do something nice for someone who needs help. Andrew Carnegie, one of the most famous American philanthropists, donated funds for libraries across our country; in 1889, he wrote an essay about what wealthy people should do with their money, saying that people have a moral obligation to give to others during their lifetime. Monetary gifts can range from a few dollars to billions of dollars. Donating time is a common form of charitable giving. In fact, Oklahomans provide thousands of hours of their time to various organizations; people in the US give away the largest percentage of personal income and have the largest percentage of volunteers compared to other countries. Making an In-kind contribution means donating a non-cash item that has value to the receiving organization. For many people, involvement in faith-based organizations is their primary source of charitable giving. WHAT CAN YOU DO? Organization Type of Contribution WHY DO PEOPLE GIVE? The reasons that people give are as varied as the opportunities to give support the mission or purpose of the organization believe the organization is doing good work show their support, it makes them feel good to help others COSTS AND BENEFITS Cash donations should be a part of your spending plan. When built into your budget, they become a part of your regular monthly expenses. If you do not plan, charitable contributions can become an emotional or impulsive decision and have a negative impact on your personal finances. Giving away money or other resources to an organization is a cost because those resources are no longer available to you; they are a benefit to the organizations receiving them. The benefits that you receive can outweigh the cost – many people enjoy the feeling of helping others and you may be able to deduct (subtract) certain charitable contributions from your personal income taxes (check the criteria on the IRS website) Charitable organizations are an important part of our society, and being involved is a great way to contribute to their mission. Giving can make you feel better about yourself, make you feel like you are a part of a bigger purpose, satisfy your need to give back to the community, and is a great addition to a college application CHECKING OUT CHARITABLE GROUPS HONORABLE INTENTIONS While people who donate have honorable intentions, not all charitable organizations are well managed or use the funds as promised. Some organizations hire expensive fundraising businesses to raise money for them; those businesses receive a portion of the money; Some spend the majority of the money on administrative expenses and big salaries Make sure that you are donating to a reputable charity and not just a good “cause”. According to the Institute for Philanthropy, a good organization will spend at least 60% of the money raised to support its programs. Smart givers find out as much information as possible before contributing! Evaluating a charitable organization can be difficult. Not a business – non-profits which means they exist to provide services or activities, not to make a profit. Consider Do – you understand the organization’s purpose and the programs it provides? Do you know why this organization is needed? Can you explain the organization’s short-term and long-term goals? Do you know how it’s progressing toward these goals? Does the information from the organization make sense to you? Can someone answer your questions? TIPS Avoid responding to telemarketers soliciting money Never respond to e-mails asking for money Beware of “sound alike” names Avoid putting change in cans by the cash register Check them out – www.guidestar.org; www.charitywatch.org; www.charitynavigator.org VOLUNTEERING YOUR TIME One of the most valuable contributions you can make is your time. Because most nonprofit or charitable organizations have limited funding and small staffs, they rely on volunteers to help get the work done. If you would like to volunteer, you should first identify what organizations best fit your interests and your needs. Next, call the organizations to see if they are looking for volunteers and what kinds of tasks need to be done. You will probably have an interview with the volunteer coordinator; as part of the interview, ask questions about the organization to ensure that you understand exactly what they do and what you will be doing. Before accepting a volunteer position, be realistic about what you can do and the hours you can work. They are relying on you to do what you say you will do when you say you will do it. Showing up late, missing deadlines, and canceling at the last minute shows a lack of respect for the organization. MAKING AN INFORMED CHOICE ABOUT CHARITABLE ORGANIZATIONS PACED Problem Alternatives Criteria Evaluate Decide PACED What is the PROBLEM you want to take on? What purpose do you want to serve? What are the ALTERNATIVES? What groups are available in your area that will help you accomplish your goal? What CRITERIA is important to you? Do you want to work after school? Work on weekends? Indoors or outdoors? EVALUATE your alternatives. DECIDE what you want to do. Are you happy with your choice?