Make your list, check it twice

The holidays are here and you’re in the giving spirit.

You understand the Community Foundation’s “Culture of Giving” campaign; you’ve volunteered or will for one of the many opportunities through the Volunteer Connection; you’ve collected envelopes from the direct-mail solicitations; and you are ready to make your year-end gifts.

Here’s a checklist to make this year’s charitable donations prudent, strategic and meaningful.

Conscious giving: Do you automatically toss a coin when you see the kettle and hear the bell? Have you written the same check to the same organization for the same amount 10 years in a row? This year, don’t just be reactive. Be aware of all the ways you give and think about each gift as if it is your only gift. Is it the right amount to the right organization using the right method at the right time? Don’t just give out of habit. Stop feeling like you’re paying bills.

Select the right gift: You can give “things” like clothes, toys and household items. You can give cash. You can give securities like stocks, bonds and mutual funds. You can give assets from an IRA or retirement fund, real estate, a life insurance policy or even a portion of your estate when you die. You can give assets and get income, or you can give income and only lend the asset. Each type of gift has potential tax implications related to income tax charitable deductions, possible avoidance of capital gains tax and potential estate tax relief. Check with your advisors to be sure your gift is personally and financially optimized.

Timing is everything: If you want your charitable deduction in 2005, you must follow certain rules, like assuring that the gift is “delivered” on or before Dec. 31. That means the mail date or hand-delivery date, not the date a check was written. In the case of a credit-card payment, delivery is the charge date, not the date you pay the bill. Verify the actual charge date if you make gifts via Web sites. Even though you provide the information by Dec. 31, the charge may not actually be processed for days.

Leverage: Find ways to make your gift multiply. Check with your employer about a matching gift program. By meeting a donor’s fundraising challenge you could double your gift. Or create your own challenge grant to stimulate giving by other donors for your charitable purpose. Make the federal government your partner by redirecting dollars you would pay in taxes to your favorite nonprofit. Then increase the size of your gift by the amount of the tax you will save through charitable deductions and avoidance.

Document: Receipts, and sometimes appraisals, are necessary to claim tax deductions. Be sure you understand the receipts you are given. Some could be for less than you thought you gave because you may have received a benefit that diminishes the deductibility, such as the cost of a dinner at a fundraising gala. Be sure you are properly acknowledged and thanked by the charitable recipient. If you are making a large gift, ask for a gift agreement that spells out how your gift is to be used.

Think longer term: Consider making a multi-year pledge. You may be able to make a larger gift than you thought you could. Your gift might be set aside to support the establishment of a new program or it might allow the organization to rely on cash flow to make important commitments. If you have a significant financial event coming up, like the sale of a business or property or an inheritance, think about this year’s philanthropy as the precursor to what will follow. Perhaps you can provide the equivalent of an endowment distribution now and build the actual endowment when the additional funds become available. By planning ahead, tax strategies can be optimized. The same is true of legacy giving. Estate planning can include a charitable component making your philanthropic potential much larger than you might think.

Give joyfully: Feel the joy of giving. Experience the satisfaction of making a difference. Philanthropy celebrates the human spirit and enhances our lives.

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