How To

How to Make the Most of Your Charitable Giving

How to Make the Most of Your Charitable Giving ::

This post was provided by BrightFunds, a charitable giving management service that carefully selects nonprofits so you can donate toward causes you care about and be proud of your impact. 

The holidays inspire us to find ways to brighten the world and do our part to make a difference in the areas that are closest to our hearts.

A whopping 88% of American households give an average of $2,213 per household to charity each year, and nearly twice as much is donated in December as in any other month of the year.

For many of us, the holidays are a time of moral and spiritual reflection, and giving at this time of year is about fulfilling our obligations to humanity or to higher powers.

But the reasons to give this time of year can also be pragmatic: December 31st is the end of the tax year and companies’ matching gifts offer.

That means it’s time to send those charitable checks and receive a tax deduction come April.

It also means if your company offers to match your donation, you can get the full advantage of the total amount by the end of the year.

Regardless of our motivations for giving, we all want to know that the money we donate is making a real difference and helping people.

It is important to give thoughtfully, and to make sure that your money is going to effective organizations doing impactful work.

Don’t give money away

During these holiday months we are bombarded by phone calls, direct mailings, and other forms of solicitation from a wide variety of nonprofits.

With so many people asking for our money, it is easy to get overwhelmed.

When someone asks for your charitable donations at a time like this, it can be tempting to just say “yes” or “no” without giving it much thought or asking many questions.

But we shouldn’t become careless with our charitable contributions. Donating to wasteful, ineffective charities is as good as throwing your money away.

Give strategically to a cause

Giving is our investment in a better world: we give to make possible the work of organizations tackling issues we care deeply about.

When we give, we should seek to get the highest social good “return” by selecting the best organizations.

Resources like GiveWell, Philanthropedia, or Charity Navigator are devoted to performing the research needed to assess which charities deserve your donations and which do not.

You can also make use of a charitable giving management services like Bright Funds.

Bright Funds has created “mutual funds” of charitable organizations working in six issue areas: education, poverty, the environment, water, health, and human rights.

Bright Funds uses a range of criteria—including financial health, accountability, transparency, and peer survey ratings—and has built collections of some of the best nonprofits working on each of these issues.

Bright Funds also serves as a workplace giving program to facilitate matching gifts and donations through payroll to strategic organizations.

Give smart, give effectively

Whatever inspires you to give during the holiday season, it is important to make sure that you are giving smart. And that means being careful and thoughtful about where you give.

Thankfully, there are tons of nonprofits out there doing great work that need your support.

And making a difference costs less than you might think: GiveWell estimates that deworming treatments that could have a major short- and long-term impact on health in developing countries costs as little as $0.50 per person treated.

In short, you don’t have to be Bill Gates or Warren Buffet to make a real difference and improve people’s lives.

For end-of-year tax purposes, it’s important to track of your donations.

Services like Bright Funds and ItsDeductible even cut out some of the work for you by providing a single report of all your giving over the course of the year with the necessary tax information.

In short, giving thoughtfully will help you make your donations go further, cause you less stress, and provide you the maximum possible tax benefit.

If you haven’t done so already, make 2013 the year you decided to become an informed, effective philanthropist.