Holiday giving can be charitable for you, too
After their Thanksgiving dinner, Tandreia Bellamy and her two teenage children headed to the Fox Valley Mall near Chicago to do some shopping, but they had no intention of seeking bargains for themselves, friends or relatives.
With the holiday spirit ingrained, they hunted for trendy sweaters, jeans, boots and hair accessories for teenage girls in the ChildServ group home in Naperville, Ill.
“My kids are blessed, and many children aren't as fortunate,” Bellamy said. “I just want to make the holidays a happier event for these girls. And I know that when children are given opportunity and nurturing, they can flourish.”
As a ChildServ board member, Bellamy's commitment is fulfilled through volunteer activities and cash donations.
The holiday season — and the end of the tax year — is a key time of year for writing checks to charity. According to a 2011 analysis by the National Philanthropic Trust, 88 percent of American households provided donations totaling $298.3 billion. The largest beneficiaries are religious institutions such as churches and synagogues. Next are education and human services. Meanwhile, 64.3 million people volunteer, donating about $296.2 billion through deeds that span the year.
Bellamy said she won't be taking any deduction for the gifts she is providing the girls in the ChildServ home, because “it wouldn't feel right. These gifts are from the heart,” she said. Yet she will deduct the cash contributions she gives to her church and other charitable groups.
It's possible for Bellamy to deduct the clothing and money, but she'd have to make a simple change in her approach with the clothes she's giving the girls. Contributions cannot be deducted if they go directly to a person, but they are eligible if they go to an authorized charitable organization. Check these websites to see if organizations are eligible nonprofits and good managers of donations: CharityNavigator.org, GuideStar.org and the Better Business Bureau at http://www.bbb.org/us/charity. Try to pick organizations that don't spend more than 20 percent to 25 percent on administration.
Recently, the Internal Revenue Service tightened some charitable deductions because “people were getting piggish,” said Dan Morris, a San Jose, Calif., certified public accountant. Now, if you provide a car to an organization and the organization sells it for scrap, you will get only the value of the scrap, not the value Kelley Blue Book places on the car. Used clothes must be listed individually with appropriate values, and the organization that receives them must approve the list and provide a receipt.
Financial advisers encourage clients with stocks or other investments that are more valuable than when they purchased them to give those investments to charitable organizations instead of cash.
“We've seen a lot of appreciation of stocks this year, and this is a great strategy to consider,” said Elizabeth Digani, UBS Financial Services financial adviser.
When an individual gives a stock or other investment to an organization, the charity sells it for its full value and doesn't have to pay any tax on it. If, instead, an individual had sold the investment, they would have owed capital gains taxes on any value added since it was purchased.
“People in the 43 percent bracket could give $10,000 in investments and reduce their tax bill by $4,300,” said Morris. “The rich get a better benefit than the poor with charitable contributions.”
Gail MarksJarvis is a personal finance columnist for the Chicago Tribune. Readers may send her email at firstname.lastname@example.org.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Stock market logs 5th straight week of gains as Dow hits record high
- Sonata exudes class
- Know flat-rate repair times
- Pennsylvania unemployment rate drops to six-year low
- Westmoreland County’s Excela Health rethinks patient debts
- New York Fed chief defends supervision of banks before Senate panel
- Highmark and UPMC feud over canceled physician contracts
- 2015 Tahoe is refined brute
- Wilkins woman leads PNC’s multicultural marketing efforts
- Drone experiments test applications for farming
- Fliers get no share of fuel cuts