In my previous post, I talked about using charitable donations as part of your year-end financial checklist. This doesn’t mean that you shouldn’t give for non-monetary reasons either. This article focuses on making the most of the dollars you want to give away before December 31.
 
1. List your favorite charities.
 
Sure, we all like the return address labels, but the reasons we give are much more. Between tax deductions, religious, and plain old feel good—be sure to donate before December 31 to maximize your deduction.
 
2. Research your charities.
 
Charity Navigator is still my favorite site for getting detailed information about your charity. Be sure your donation goes to a charity that has:
 
-At least four stars (the highest rating)
-A score of at least 60 out of 70
-At least 90% of its revenue going toward the actual program
 
Example: Hurricane Sandy Charities
This page lists charities that are accepting donations for Hurricane Sandy. Stick to the four star ones only!
 
3. Donate via text.
 
If you decide to donate via text, make sure it’s not an impulse decision and you really know the charity. Make sure your nieces and nephews understand this if they’re thinking of participating in text donations. I’m not a fan and suggest holding off!
 
4. Keep records!
 
The charity is not always going to send you a record. If you donate via email, print out the receipt. If you write a check, make a copy for your file. (Another reason not to donate via text is you do not have a record for your files, easily.)
 
5. Is your charity “TAX EXEMPT” or “TAX DEDUCTIBLE?”
 
If the charity you are donating to is “tax exempt,” you may not be eligible to use the contribution as a deduction. “Tax deductible” is what you want your charity and donation to be.

Published: December 19, 2012