HOW TO CHOOSE WORTHY CHARITABLE CAUSES IN 2022
Did you know that you can make charitable contributions as a business as well as donating as an individual? If not, you’ve been missing out on a great opportunity to get a tax deduction.
Of course, if you use a professional CPA you’ve likely already been advised about the benefit of donating. But the tax break is only one aspect of donating. The better part of the deal is the feeling of giving to an organization that is dedicated to helping the less fortunate. Unfortunately, not all charitable causes are worthy. Here’s a guide to choosing worthy charitable causes in 2022.
Decide What You Care About
There are thousands of charities to choose from. This gives you ample opportunity to give to causes that you feel personally connected to. For instance, if you love animals, you might donate to an animal shelter or an animal sanctuary. If one of your parents suffers from dementia, you might like to donate to an Alzheimers research center or a long-term care facility that has non-profit status. The point is, figure out what matters to you and then you can start to narrow down possibilities.
Decide How to Disburse Contribution
You don’t have to donate all of your contribution to just one cause, either. You can choose to distribute the money across several organizations equally, or give the bulk to one and then the rest individually. You can also donate monthly. You could, for instance, make a business pledge to donate 2% of each month’s profits to a charitable cause. This can help smaller business to make the donations that they deem important without trying to handle a bulk sum in one month.
Think Local
When thinking about charitable causes, most people automatically think about national organizations like the American Cancer Society, the SPCA and more. But consider that you might be able to effect more dramatic change by donating locally. Almost every little town across the country has its own charitable causes. Maybe it’s a small office that helps the mentally ill, or one that helps vets find jobs, or one that keeps animals out of kill shelters. These little non-profits need a lot more help than the larger charities that get national media coverage. Wouldn’t it be nice to see your local women’s shelter stay open another year due to your small business donation? You might get more personal satisfaction out of seeing for yourself the impact you can make.
Consider How the Funds Will be Used
Charities use donation money in different ways. Some charitable organizations have very high administrative costs They may pay employees high salaries and use only a small percentage of donations to actually help those on their mission statement. Before donating, take a look at the financial documents of the organization. This will give you a clear picture of how much of your donation will actually go toward your chosen cause. If you can’t understand or don’t have the time to read these documents, ask your CPA to help you choose among a select few that you’re interested in.
Rely on Charity Watchdogs
There are organizations that oversee charitable organizations in a non-official way. These organizations provide insight into how the charity operates, if there are complaints against it and how much help the charity has provided. These “watchdogs” can be very helpful when choosing a worthy charity in 2022. Visit Give.org, CharityWatch.org, and CharityNavigator.org for more information.
How to Find Worthy Charities in 2022
To find a list of possible charities to donate to in 2022, start with some websites. You can look at the sites listed in the previous chapter. You can also try a charity directory, such as GuideStar.org. Another avenue is to visit the website of your local Chamber of Commerce. They may have a list of local charities, even ones that are newer to your area. Also, consider visiting your town hall and asking how local charities are kept track of. If you just want to donate to a national charity, a simple online search for “veteran’s charities” or something similar will also work. You may also consider talking to colleagues, friends and neighbors and letting them know you are researching how best to utilize your donation spend for the year. They may know of some very small local charities that need urgent help.
Be Wary of Pseudo-Charities
Know that, in order to be tax deductible, you need to make sure that your charity of choice has actual tax deductible status. Usually this is in the form of a 501(c)(3) entity. When asked, they should be able to provide you with their tax-exempt status number. In addition, make sure you acquire a written receipt for your donation. If the IRS audits you, you may be asked to present proof of your donation.
Your CPA can be very helpful with your charitable contributions in 2022. Remember, you can also donate unused office equipment so long as it still has some value. If that equipment is still being depreciated, your CPA will need to make certain adjustments on your tax returns. And you still need to get a receipt, with the estimated value of the equipment. The time to start looking at worthy charitable causes is now. The sooner you begin your search, the more care you can take to ensure that the charity you choose is truly worthy.
