Donating to Charity

Before donating to a charity or non-profit organization, make sure to do your research.

Donate to Charity

You may choose to give money or donate property to a charity. Your donations can be helpful for medical research, relief efforts after disasters, or on-going operations.

Research

Before you donate money or goods to a charity, use this checklist to research the charity. Be certain that the charity is real. Several agencies offer tips, databases, and reports that help you evaluate the operation of charities:

Types of Donations

Monetary

Money is the most common donation. Pay by check or credit card, to protect yourself from scams and help with your record keeping.

Goods and Personal Property

Some charities accept non-cash donations, such as clothing and household items. Donate items that are in good (or better) condition. Keep a list of the items you donated, for your taxes. 

Vehicles

You can donate your car, truck, boat, or other vehicle to a charity. An organization may give a donated vehicle to someone,  use it for operations, or sell it at auction.  If you donate a vehicle, you will need to transfer the title of the to the charity. Also, remove license plates and registration documents before you donate the car.

Other Property

You may also give other types of items to charities:

  • Art
  • Jewelry
  • Stocks
  • Real Estate
  • Patents

The value of these items may require an expert appraisal or depend on offers to purchase the items and the timing of the donation.

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Charity Scams

Some scammers set up fake organizations, taking advantage of the public’s generosity, especially after a tragedy or disaster.

Report Charity Scams

Although the Do Not Call Registry doesn’t apply to charities, you can ask an organization not to contact you again.

How to Protect Yourself

Follow these tips to help you detect common charity scam tactics:

Do

  • Check out the charity with your state consumer protection office or the Better Business Bureau before you give.

  • Verify the name. Fake charities often choose names that are similar to well established charities or use keywords that elicit sympathy, such as “children,” “cancer,” or “disaster relief.”

Don’t

  • Don’t give in to high pressure tactics such as urging you to donate immediately.

  • Don’t assume that you can get a tax deduction for donating to an organization. Use the IRS’s database of 501(c)3 organizations to find out if it has this status.

  • Don’t send cash. Pay with a check or credit card.

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Federal Tax Deductions for Charitable Donations

You may be able to claim a deduction on your federal taxes if you donated to a 501(c)3 organization. In order to deduct your donations you must file an itemized federal tax return, along with Schedule A and a form 8283 for your non-cash donations.

The amount of money that you can deduct on your taxes may not be equal to the total amount of your donations. If you donate non-cash items, you can claim the fair market value of the items on your taxes.

If you donated a vehicle, the amount of your deduction depends on if the car is used by the organization or sold at an auction. The IRS’s publication “A Donor’s Guide to Vehicle Donation” explains how your deduction is determined and the documents you must have to claim a deduction.

If you donated money to the charity and you received a gift in exchange, or if part of your contribution paid for a dinner, event entrance, or registration in a race, the entire amount is not tax deductible. Rather, the only part of your donation that you can deduct on your federal income taxes is the amount that is in excess of the value of the gift, dinner, or race.

Recordkeeping

Keep records of your donations to charities. You may not have to send these documents with your tax returns, but these documents are good to include with your other tax records. Some common documents include:

  • Canceled check to the organization
  • Credit card statement showing a payment to the organization
  • Receipt from the organization
  • Annual giving statement from the charity or non-profit
  • Email confirmation from the organization
  • Written acknowledgment for vehicle donations
  • Itemized list of the items you donated
  • Vehicle identification number for vehicle donations
  • Signed over vehicle title
  • Phone bill, if you gave a donation through a text message
  • Valuations of stocks, real estate, art, or jewelry donated to a charity

There are some pieces of information that may be included in receipts and giving statements:

  • Name of the organization
  • Date of the donation
  • Amount of the donation
  • Statement that no goods or services were provided by the charity in return for your donation (if that was the case)
  • Vehicle identification number (VIN) for vehicle donations

Federal Tax Deductions for Small Business Charitable Donations

Small businesses and individuals generally have the same requirements when filing to receive a tax deduction for charitable giving. However, there are some important issues companies should know about.

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Donate to Charity as a Small Business

Many small businesses donate to charity in some form each year. Giving to a charitable cause is not only good for society, it can also be good for business.

Reasons Businesses Donate

Small businesses decide to support charitable causes for a variety of reasons:

  • Help society - Businesses can use their size and influence to make a significant impact in a community, or on behalf of a cause.
  • Increase customer satisfaction or brand awareness - Businesses can set themselves apart from the competition and become more likable and recognizable by publicly supporting a cause. Some businesses even choose to involve customers in their charitable campaigns, or support nonprofit organizations with missions that are relevant to the company’s product or service. For example, a technology firm may partner with a charity that teaches computer skills to underprivileged students.
  • Tax deductions - Businesses can receive a tax deduction for qualifying charitable donations.
  • Employee retention and satisfaction - Businesses can improve employee morale and create a more positive company culture by mobilizing in support of a cause. Some companies allow employees to nominate charities to partner with, or choose the way the company donates.

Types of Donations

Businesses can donate to a charitable cause in many ways:

  • Money - Write a check, set aside a portion of revenue from sales, or collect donations from employees. Some companies may also offer to match employee donations, or choose to develop a specific product or service and donate the profits from its sale.
  • Inventory - Give merchandise or products like food, clothing, toiletries, furniture, or building materials.
  • Events - Organize food, clothing, supply, or blood drives. Companies can also sponsor sports teams, athletic competitions, arts productions, community projects, and fundraisers.
  • Volunteer - Work for free. Nonprofit organizations may need tutors, drivers, servers, or warehouse staff, for example. Companies can schedule a time for employees to volunteer together or encourage staff to sign up in their free time. Some businesses may choose to offer paid time off for volunteering.
  • Services - Donate professional skills. Nonprofit organizations may need help in the legal, policy, medical, dental, counseling, finance, technology, or administrative fields, among others. For example, beauticians may coordinate with a women’s shelter to style hair or give manicures, and artists may work with a community center to lead a children’s craft.
  • Time - Establish a leave-based donation program. This allows employees to forego their paid leave days in exchange for the company making a monetary donation to a charity.
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Last Updated: December 15, 2017