Interest in philanthropy is on the rise: According to the IRS, charitable contributions from the top 1 percent of income earners in the U.S. have increased by nearly 60 percent since the early 2000s. Not surprisingly, that rise in charitable giving has also created interest in creating Intentional Giving Plans that take giving beyond writing a check.
As you develop your overall giving strategy, consider one or more of these potentially untapped opportunities. From quick and simple to more detailed to implement, these six ideas can help you give more toward the specific programs, people, and resources that mean the most to you — and possibly gain some tax benefits as well.
In addition to cash donations, you may also consider giving non-financial assets to a charitable organization. These could include non-cash assets — such as collectibles, real estate, vehicles, or even household property. Other options in this category include closely-held securities.
Is there a potential tax benefit? Yes, non-financial donations may be eligible for tax deductions. Be sure to discuss your intentions with your charitable, legal, and tax advisors before moving ahead to make sure you understand potential financial impacts.
Get started: Timing is everything. Don’t wait until the end of the year to begin talking to your advisors and the organization you wish to receive the donation. Most charities have a lengthy process to help them follow legal and tax requirements for evaluating and reporting such gifts. In addition, be strategic in determining when you want the asset to leave your balance sheet.
There’s more paperwork involved with this option, but if you’re passionate about education or your alma mater, consider setting up a scholarship fund or endowment. You can help establish the application and qualifications for the recipient(s) or usage guidelines to ensure that your money is going to individuals and programs you want to support.
Is there a potential tax benefit? Yes, these donations are eligible for tax deductions. Be sure to discuss the guidelines with your charitable and tax advisors before moving ahead.
Get started: Contact the educational organization you’d like to support and ask for their guidelines. Some schools will accept as little as $1,000 for a single scholarship, while others may require a larger contribution — $20,000 or more — to establish a scholarship fund.
This option is much more of a time commitment. If you have public speaking skills, or possibly a musical talent, consider offering your services to your favorite cause and waive your fee. Waiving your fee allows the organization to use your speaking engagement or performance as a fundraiser.
Is there a potential tax benefit? Out-of-pocket expenses incurred while donating services can be tax deductible, so be sure to discuss this strategy with your tax advisor.
Get started: Contact a charitable organization you support and talk to them about a speaking or other talent-related engagement for their next event or fundraiser.
Many major credit card rewards programs allow you to turn points or rewards into charitable donations. Depending on your rewards program, the charity may receive the points or the card issuer may turn them into a cash donation.
Is there a potential tax benefit? The IRS views credit card rewards as discounts, not income, so you can’t typically claim a deduction for the donation.
Get started: Visit your loyalty program’s website for charity donation information, or call them to learn how you can donate points or other rewards to a nonprofit.
Most airlines allow you to donate frequent flyer miles, though there may be restrictions or minimum donation amounts. Some larger charities take miles directly.
Is there a potential tax benefit? These donations are considered gifts, which means they generally aren’t eligible for tax deductions.
Get started: Contact the organization you want to support and see if they can accept your miles. Or, contact your frequent flier miles program and ask them to provide a list of charitable organizations eligible for miles transfer.
Do you hold season tickets to a sports team? Or do you own a vacation home or an exotic car? You can help your favorite cause raise necessary funds by donating time at your vacation home, use of your vehicle, or tickets to an event — nonprofits often work to procure experiences like these for auctions.
Is there a potential tax benefit? These types of donations typically aren’t eligible for deductions. Talk to your tax advisor about your specific donation to make sure.
Get started: Contact a charitable organization you support and talk to them about an asset or experience you’d like to donate for their next auction fundraiser.