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U.S. Citizens Give Generously

Americans gave an estimated $557.16 billion to U.S. charities in 2023, according to Giving USA 2023: The Annual Report on Philanthropy for the Year 2023 (from the Giving USA Foundation, the Giving Institute, and the Indiana University Lilly Family School of Philanthropy). The total includes charitable contributions from individuals, estates, foundations, and corporations.

HOW TO CHOOSE

If you want to give to an organization that makes the most of your charitable giving, learn how much of each dollar goes toward the charity and how much is spent elsewhere. You can find some organizations with websites that evaluate the legitimacy of charities and how they spend contributions.

Also, look for a charity’s IRS Form 990 and ask to see its audited financial statement to ensure it meets your desired standards. Match your giving objectives with a charity’s mission and demonstrated results. Look for charities that best match your values.

GET HELP

If you make significant charitable contributions, consider enlisting the aid of your advisor and an estate planning attorney. Although the federal estate tax exclusion is higher than in the past, some families may exceed it while also dealing with lower state estate and inheritance tax thresholds. Structured properly, charitable giving can benefit your charity and reduce estate taxes.

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Check Before Donating

Whatever your charitable passion, you can find an organization supporting it. But how do you determine whether an organization is legitimate?

RED FLAGS

Watch out for these scam signs:

  • Requests for unneeded personal information such as your Social Security number
  • Pressure to donate immediately
  • You can’t verify the organization’s name, address, and website yourself

DO THE RESEARCH

Use the IRS Tax-Exempt Organization Search (TEOS) tool to find information about the charity’s tax-exempt status and if the charity is eligible for tax deductible donations. The charity’s Form 990s posted on the site shows how much of the organization’s revenue is used for charitable work versus administrative expenses.

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Substaintiating Noncash Charitable Donations

Noncash charitable deductions allow taxpayers to deduct the fair market value of donated items on their tax returns. These steps can help ensure your charitable deductions are adequately substantiated and accepted by the IRS.

RECEIPTS EVERY TIME

Regardless of the value, you should have a receipt from the charity for any noncash donation. This document should include the charity’s name, the date and location of the contribution, and a reasonably detailed description of the donated property. Consider taking photos of donated items to document their condition.

HIGHER VALUE ITEMS

If the value of your noncash donations is over $500 for the tax year, you must also include IRS Form 8283 with your tax return. For each item or group of similar items valued over $500, you must provide additional details including when you acquired the item and its original cost.

GET AN APPRAISAL

If you’re donating an item or a group of similar items worth more than $5,000, you’ll generally need a qualified appraisal of the item’s fair market value, and you must also complete Section B of Form 8283. There are exceptions for publicly traded securities, vehicles, and intellectual property.