Main content
Course: Financial Literacy > Unit 4
Lesson 2: Charitable givingHow to give to a charity
Once you decide on the cause you would like to support, it is important to ensure the charity of your choice is a legitimate charity and will use your money properly. Read to find out more.
What is the difference between charities, fundraisers, and organizations?
Not all causes or organizations that ask for or receive donations are the same. Just because someone asks you for money to help a need, does not necessarily mean they are a charity. Because of this, it is important to understand the difference:
- Charities are non-profit organizations that have a charitable purpose and are registered or recognized by the government or a regulatory body. Any donation to a charity can be claimed on your tax return.
- Fundraisers are events or campaigns that raise money for a specific cause or organization, such as a walkathon, a raffle, or a concert. Anything given to a fundraiser, typically, cannot be claimed on a tax return.
- Organizations are groups or entities that have a common goal or interest, such as a club, a society, or a foundation. Gifts to organizations are typically not included on tax returns.
You can also use some online resources and tools to help you evaluate and compare causes and organizations, such as:
- Charity Navigator, which is a website that rates and ranks charities based on their financial health, accountability, and transparency
- GiveWell, which is a website that recommends and reviews charities based on their cost-effectiveness, evidence, and room for more funding
- Giving What We Can, which is a website that provides guidance and tools for effective and ethical giving
How can you make your charitable giving more effective and efficient?
There are many ways to make your charitable giving more effective and efficient. This will help you maximize the impact and value of your donation and minimize the cost and hassle. Here are some tips and strategies:
- Set a budget, which is the amount of money that you can afford and want to give to charity.
- Research the charities or organizations, which means finding out their mission, vision, goals, activities, outcomes, and ratings. Watch out for scams in forms that can hide behind fundraisers.
- Choose the form and timing of your donation, which means deciding what and when to give, such as cash, time or goods, monthly or yearly, online or offline.
- Keep records, which means keeping track of your donations, such as receipts, confirmations, or statements, so that you can use them when you file your taxes.
Conclusion
Charitable giving is a powerful and rewarding way of expressing your values and making a difference in the world and in your own life. By understanding what charitable giving is, why people do it, and how it can affect you and others, you can make informed and meaningful decisions about your generosity. By looking for signs of quality and legitimacy, you can also make sure that your donation goes to a worthy and reliable cause or organization.
We hope that this lesson has inspired and empowered you to explore and practice charitable giving in your own way. Remember, every donation counts and every donor matters. Happy giving!
Want to join the conversation?
Wonderful article, I didn't think charity could also be that interesting. So doing volunteer work for charity is also considered a kind of charity that can have a tax deduction. I got some questions to ask:
1, Does that mean I have to ask the organization that I served that whether they can give me some form/receipt/certificate so that I can claim the tax return?
2, How much would it be and how do they usually calculate?(10 votes)
YES, you must ask for a certificate of valuation from the organization. You can't claim a tax deduction without some sort of documentation.
INSOFAR AS "how much value", the organization itself will set a value on that, likely based on what it would pay for someone to do the identical job, and whether your contribution of time and labor was worth that much.(7 votes)
Is No Kid Hungry a charity?(9 votes)
Yes, No Kid Hungry is a registered 501(c)(3) non-profit organization.
Happy Learning!(4 votes)
Am I the only one who does not like "Influencers?"(3 votes)
I think it depends on the influencer type. Like David Alexander said, counselors can be influencers; what I don't like are the social media influencers, like JoJo Siwa.(7 votes)
- Would donating to a 501(c)(3) type of non-profit like Khan Academy count toward my tax deductions?(2 votes)
Yes, it would.(4 votes)
Can you request a tax return for charity on W2?(2 votes)- The Charity itself (if it is registered with the tax authorities) will send you a tax receipt somewhere around the 31st of January. If your contributions and other deductions exceed the "standard deduction amount", then these receipts will be of value to you. If your other deductions and contributions do not reach that threshold, you need not worry about that receipt. It will just be added paperwork which is unnecessary.(3 votes)
yes it is a charity(2 votes)- ok so with charity i thought a gofundme page was kind of like a charity and everything because alot of people use it as one!!(1 vote)
- You make a good point. If you're giving money away because there are people in need, a gofundme page is a charity. But, if you are planning to claim charity giving on your tax return (so as not to have to pay taxes on the amount you give), a gofundme donation will not be allowed. If you want to claim your donation as a deduction from your taxable income, it has to go to an organization that is registered as a charity. So, something like a mosque, an art museum, a hospital or a foundation that supports research.(2 votes)
- A problem with tax deductible charities is that what counts as a charity is determined by the government, allowing it to financially pressure opposition and small unrecognized groups.
Tax deductions for charity also mean part of the money that would've funded government programs gets redirected for other causes. In effect, this allows a significant portion of would-be government spending to be controlled by a mass of unelected people and groups just because of their wealth (since wealthier people & groups tend to write off their taxes more and have a higher percentage tax rate)
Charities should be done without any expectation of return such as tax deduction(1 vote)- I agree with your conclusion, but heartily DISagree with the reasoning you use to get there.(1 vote)
Is it legal to donate to Hammas?(1 vote)- Probably a direct donation is illegal. You might seek out a legal organization that funds humanitarian causes in Gaza, though, and donate to that without a problem.(0 votes)
- is no kid hungry a charity(0 votes)