Plus, charities know just how to use your money for the greatest good. Not only will your end-of-the-year taxes thank you, but also you will love the great feeling you have when you pay it forward.
Start with a Plan
Rather than giving impulsively, consider what your plan for giving is at the beginning of each year. Some prefer to wait until after tax season so that they can see what their gross adjusted income was the previous year.
Whether you like to give a solid percentage of your income or a set amount of money each year, you should set up your plan before writing out your first check.
Spread Out Your Giving
Instead of giving all of your money to one organization, consider spreading it out a bit. Some professionals recommend the 50/30/20 principle in which you give 50 percent of your charitable contributions to one or two major causes, 30 percent to local organizations and 20 percent to unexpected needs.
Give a Large Enough Amount
On the other hand, keep in mind that any charity prefers a large enough amount to offset any transaction costs. Rather than giving 5 or 10 dollars to dozens of organizations, try to narrow down your focus to a dozen or fewer organizations over the course of the year.
Some charities may even give you the option of covering transaction expenses yourself, which can be a smart move.
Ask a Professional for Help
Because charitable giving can often be written off as a deduction on your taxes, you will want to give wisely and keep receipts.
This is especially important if you are giving charitably from your IRAs or retirement accounts. A professional, such as one from RMR Wealth Builders Inc., can help you know what will be best for you.
Choose the Right Charities
Your friends, family, or financial planners in NJ may be able to direct you to which charities are legitimate and worthy causes. However, you may still want to do your own research to feel good about your choice.
Check out online sites that show you how much of any charitable donation actually goes to helping the less fortunate for numerous popular charities.
Giving to a charitable cause or to a specific charity should be a long-term commitment for you. While most experts say that it is fine to give a small percentage of your charitable investment amount to spur-of-the-moment needs, it is best to have a plan each year for who and what you would most like to support.
Consider what charities speak to you personally, and then enjoy giving back to others who are less fortunate than you are.
