The downturn in the economy has caused more than half of non-profit organizations worldwide to experience declines in donations. This is according to the U.S.-based Chronicle of Philanthropy. This picture doesn't get much rosier for non-profit groups through 2010.
During the holiday season of good will, we should be thinking of ways to help charities get through the lag times. If you are one of the fortunate ones who has escaped the economic crisis unscathed or are in a recovery mode, then consider going the extra mile with charitable donations.
There are ways that you can be generous with philanthropy while ensuring that your own financial planning is enhanced.
As an individual you have a number of options to consider:
- Go through your financial portfolio and look at opportunities of making a gift from your stocks, bonds or mutual funds. If your investments in stocks purchased in 2009 have gone up significantly, you can offset the impact of capital gains by donating shares to charity. As well as the capital gains exemption, you will also receive a tax receipt for the full market value of the donation.
- Set up a charitable-giving or donor-advised fund. You can decide which charities will receive donations and the contributions will be invested to maximize the worth of the donation to increase its value. In return, an immediate tax benefit will be provided which can be carried for up to 5 years.
- If you are thinking ahead to your legacy, you can donate gifts of life insurance by naming a charity as the beneficiary. The charity will receive the cash surrender value plus any dividends and interest upon your death. As an immediate benefit, you will receive a tax credit for the value of the donation.
With some planning it is possible to make philanthropic giving to charities a win-win situation in hard times.
