Many of us are committed to helping those less fortunate and donating to charity. While my contributions to my church have not been reduced (a portion of the money stays in the community to help the less fortunate and a portion goes on to “headquarters”), I have been a bit choosy about my other charitable contributions during this recession.
And then I had an epiphany: Charitable giving doesn’t always have to be about cash. There are others ways to donate to others during a recession. Here are some things you can do to donate to charity.
- Time. You can donate your time. My son just started 1st grade. That means I have more time. While I want to do some things for myself (like swim laps and practice my musical instruments), I can also donate time to help others. There are a number of charities and shelters in town that provide helpful services to those in need of them. I can help out with a little of my time.
- Stuff. We’ve got a lot of stuff laying around. I’ve thought about selling my stuff, but what if I donate it instead? We have baby clothes, unused exercise equipment and more. Instead of selling for our own gain, we can donate it to various agencies in town. The women’s shelter or the children and family center could probably use the clothes, toys and blankets we have. We have extra food that could go to the food pantry. Donations to the local thrift store provide others with access to affordable goods, and jobs for those who are having difficulty.
- Stocks. If you have stock you have had for a long time, you can hand it over. If you bought 100 shares stock in some company for $5 a share 15 years ago, and now its worth $15 a share (even with the recession, you can see how holding something a long time can pay off in some cases), you can hand it over to charity. That $500 is now worth $1,500. And if you donate it, you won’t have to pay capital gains on the $1,000 you earned. But you can still deduct the entire $1,500 if you itemize.
- Other asset gifts. You can use donor-advised funds to provide you with the means to help charities whenever without a capital gains tax. You can also sell depreciated stocks and take both a charity write-off and a capital loss. It is also possible to donate life insurance policies and other assets to charities. Make sure you consult with a tax professional, though, before trying to reap any of the tax related advantages.
And, of course, if you still want to donate cash, you can increase the value of your donation by doing your homework. Instead of spreading yourself thin, pick one or two charities that you really believe in, and donate the bulk of money there. That way, you will get more bang for your charity buck, putting your money where you think it will accomplish the most.
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