This year, Giving Tuesday falls on Tuesday, November 30. Do you have it on your calendar already? Do you have your bank account plumped and primed to make room for your favorite charity?
In case you were wondering, Americans are a giving bunch. A total of 34.8 million Americans donated $2.47 billion on Giving Tuesday last year, according to Giving Tuesday, Inc., the nonprofit behind #GivingTuesday. Giving Tuesday always occurs on the first Tuesday after Black Friday.
Even if you’ve participated in Giving Tuesday before, you might want a quick rundown of how it “works.” Luckily, you can do more than just donate your money. You can also donate your time and goods to a specific cause. You can rake leaves for a neighbor, volunteer in person or virtually or show gratitude to health care workers by taking a basket to the nurse’s station at your local hospital.
How to Plan to Give for #GivingTuesday
The steps you must take to give might seem simple. You just go to the website for the organization you’d like to donate to and submit your credit card information, right? Well, yes! But you might want to consider doing some more in-depth planning, especially with your taxes.
Let’s walk through the steps you can take to prepare yourself for Giving Tuesday.
Step 1: Choose the charity that “speaks” to you.
What charity speaks to you? Maybe a loved one battled pancreatic cancer and you want to donate to the Lustgarten Foundation. Maybe you’ve got a deepening desire to give to your alma mater or the college or university a loved one attends. You can also give to multiple charities if you prefer.
Charity Navigator offers an excellent service to help you identify which organizations fit your requirements. The site highlights what it calls “trust indicators” so you know which charities offer the most accountable and transparent information possible. In other words, you can trust the organizations listed on the site. Charity Navigator also doesn’t charge the organizations it evaluates, which means it keeps its ratings completely objective.
Got an organization in mind? Great! Let’s move on to the next step.
Step 2: Identify how much you’ll give.
How much do you want to give? Naturally, this comes down to a personal decision. You can give as little or as much as you feel comfortable giving, but you might identify an amount that makes sense for you and/or an amount based on your desired tax deduction amount.
You may want to identify a method that works for you in terms of increasing your contribution, little by little. Some organizations allow you to commit to their cause each month through automatic credit card charges.
You can even start off by donating items you own, such as a car or clothing if you don’t think you can come up with the cash to donate a set amount of dollars.
Step 3: Determine how you plan to give.
How do you plan to give? Do you prefer to give through regular donations or through a lump sum on Giving Tuesday? Look into all the donation options each organization offers. Some organizations run campaigns throughout the year and some companies offer a matching donation as well.
You can tap into all sorts of setups for giving, including through a donor-advised fund, a private or family foundation and a giving circle. Let’s take a look at a few of these options:
- Donor-advised fund: Donor-advised funds, also called charitable giving accounts, refer to charitable giving vehicles administered by public charities. They are created to manage charitable donations on behalf of organizations, families or individuals. The sponsoring institution manages your money once you put the money into the fund.
- Private or family foundation: Private or family foundations allow you to give money exactly how you envision. The IRS does impose rules on private foundations, including the amount you must give each year. You must get a lawyer and accountant to help you set up the foundation so the foundation meets its goals and fulfills all IRS requirements.
- Giving circle: You can find statewide or national giving circles, which are community gatherings that propose giving targets to specific charities or groups. Giving circles pool their money and choose which charity they’ll donate to together.
Step 4: Examine the tax advantages.
Is giving still altruistic even though you’re looking into the tax advantages for yourself? Absolutely! One of the benefits to giving is that the IRS recognizes it in the form of tax deductions.
You can generally deduct up to 60% of your adjusted gross income through your donations to charity. Note that you can deduct 100% if you make the gifts in cash form. However, depending on the type of contribution and the type of organization to which you give, you can only contribute 20%, 30% or 50% — this includes private foundations, veterans organizations and more. Check out IRS Publication 526, which can walk you through the types of organizations qualified to receive contributions, the types of contributions you can deduct, the amount you can deduct, the records you should keep and how to report contributions.
Step 5: Get others excited about giving!
The next step in the process involves getting other people excited about giving on Giving Tuesday! The best way to get people interested and involved may mean that you rely on a multitude of efforts — you may post on social media about your plan to contribute, you may rally your giving circle, you may make personal calls or send text messages to family and friends.
If you work for a nonprofit organization, you may want to put together a social media or email campaign to collect donations. Create content ahead of time: Use the hashtag so people can find you, include links on social media posts to your Giving Tuesday campaign. On Giving Tuesday, respond to those who donate, thank them repeatedly and do everything you can to engage your audience, with images, music and more. </p
However you choose to rally others around your cause, it can only help your contributions!
Step 6: Share on social media.
On #GivingTuesday, share on social media how you gave money to your organization or cause. You may spur others to get involved, whether they know you or are friends of your friends. The organization will only benefit from your efforts!
Step 7: Increase your giving percentage each year.
Have big dreams of donating a lot but don’t have a lot of cash on hand now? It’s okay. You can also consider increasing the amount you give, little by little each year. For example, you may choose to start out by committing 1% of your salary each year, then step that up incrementally until you reach a certain percentage, such as 10% of your income.
Just like you might increase your retirement savings percentage, why not do the same for your philanthropic efforts?
Increase your donations to whatever percentage feels comfortable to you — there are no rules here!
Step 8: Teach your kids about giving.
Finally, teach your kids about philanthropy at an early age so they understand that they, too, can make a difference. Be a role model yourself by giving often and talk to them openly about how much you give to organizations. Show them the thank you emails you receive from organizations and ask them to help you choose which charities to donate to. Kids love to help choose charities, particularly if a particular charity resonates with them or their interests.
Plan Ahead for #GivingTuesday
When you’re ready to donate, go for it with gusto. Just add some planning and organization (you need to give your accountant something to do!), rally some people to donate with (you may wield tremendous influence!) and document your day on social media using #GivingTuesday. Finally, don’t forget to involve your kids in the process.
Don’t forget to check out UNest’s blog for more tips and tricks about taxes, giving to charity and saving for college.
This material is for informational purposes only and should not be construed as financial, legal, or tax advice. You should consult your own financial, legal, and tax advisors before engaging in any transaction. Information, including hypothetical projections of finances, may not take into account taxes, commissions, or other factors which may significantly affect potential outcomes. This material should not be considered an offer or recommendation to buy or sell a security. While information and sources are believed to be accurate, UNest does not guarantee the accuracy or completeness of any information or source provided herein and is under no obligation to update this information.
