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 The idea is catching on, with online donations for the day projected
to surpass $40 million this year, up from $32 million in 2013,
according to the Chronicle of Philanthropy.
Reuters hosted a team of charitable giving experts for a Twitter
chat on Giving Tuesday (http://twitter.com/#ReutersCharity) to get
their insights and tips.
The panel included Ken Berger, head of Charity Navigator; Clam
Lorenz, general manager for social innovation at PayPal; Chris
Carnal, who head of fundraising at Fidelity Charitable; Kat Rosqueta,
executive director of the Center for High Impact Philanthropy at the
University of Pennsylvania; and personal finance expert Jean Chatzky.
Among others who weighed in: experts from Intuit's TurboTax and
Leslie Lenkowsky, professor of practice in public affairs and
philanthropy at Indiana University's School of Public and
Environmental Affairs.
Here are some of the questions they tackled:
Q: How do you decide on charities to support?
A: The top reason people donate to a charity is because
"someone asked me," according to Charity Navigator. But experts
suggest taking control and deciding to give to organizations you
believe in and have vetted.
Charity Navigator (http://www.charitynavigator.org/), Guidestar
(http://www.guidestar.org/) and the Better Business Bureau's
Give.org (http://give.org) are among the websites that can help
donors ensure their money is going to a legitimate group. For
example, these sites allow you to look at funding spent on programs
as opposed to operations.
Sit down with your family, including young kids, to discuss the
importance of being charitable. Focus on the organizations that mean
the most to you rather than making lots of small donations. If you
do not have a family, start a giving club with friends and donate
together.
With a giving plan in place, it is much easier to say no to the
barrage of charitable asks from friends, colleagues and relatives.
Also remember that giving does not only mean donating money. It can
involve donating household items, clothes or your time.
Q: What is a donor-advised fund, and how does that work as a
method of making contributions?
A: Donor-advised funds are investment accounts you start at a
brokerage house or community foundation where the money is
designated to be donated to charity. The starting point for most
accounts is $5,000, and donors use them to facilitate giving because
they can take the tax deduction when the money goes into the
account. You can designate the organizations to receive the money at
any point. The money can grow in the meantime, and the paperwork is
simplified through the financial institution holding the account.
Q: Does it really matter how you give?
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A: Some contributions, such as volunteer time, while
beneficial to a charity, are not tax-deductible (but the cost of
transportation to get there is).
Ask charities for a preferred method of making your donation. Even
using a credit card could cost a charity 6 percent in transaction
fees. PayPal and Capital One are among financial service companies
that arrange for fee-free donations.
Q: How can you donate rewards, such as airline miles? What
sort of deduction can you claim?
A: Airlines and hotel chains typically make it simple to
donate your rewards to charity. But while they also assign a value
to them, the U.S. Internal Revenue Service does not allow you to
claim donated miles as a tax deduction because they are not
considered property, according to TurboTax.
Q: What is the best way to avoid making all your
contributions at year's end?
A: Once you choose where to contribute, consider automatic online
payments or scheduling donations over a year. Gifting throughout the
year also helps charities with their cash flow.
Q: What are other ways to amp up the impact of gifts?
A: While not the same as making a direct donation, services
like AmazonSmile (http://smile.amazon.com/) and Goodsearch (http://www.goodsearch.com/)
let you tie your own spending to charities.
Amazon's program, for instance, allows you to designate 0.5 percent
of your purchases on the website to a charity of your choice.
Through apps like Goodsearch, a portion of your purchases at
participating retailers are donated to charity. Your individual
impact might not be huge, but collectively it can add up.
To follow the entire conversation, check out the #ReutersCharity
hashtag on Twitter.
(Editing by Lauren Young, Beth Pinsker and Lisa Von Ahn)
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