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.

1. 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.
2. 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.
3. 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.
4. 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.

Image source: Wikimedia Commons

Post from: EveryJoe

Alternative Ways to Donate in a Recession

Tax proposals

For the most part, both of the plans hinge on taxes:

• John McCain wants to reduce the tax rate on early withdrawals from IRAs and 401(k)s while temporarily waiving the 10% early withdrawal penalty. (Obama wants to waive the penalty, but has not expressed a plan for lowering the income tax on such withdrawals.)
• Barack Obama wants to give companies a $3,000 tax credit for each person hired. His reasoning is that it will encourage employment at a time when the jobless rate is on the rise.
• John McCain wants to slash the long-term capital gains tax for 2009 and 2010. That way, he insists, more people will want to invest and save. Plus, in theory, more people and businesses will sell their shares in order to take advantage of the tax treatment, and that will result in a chunk of capital that can be used for other things.
• A tax write-off acceleration for those forced to sell in the current market is also being encouraged by McCain.

The rest of Barack Obama’s propsals

While John McCain’s new details pretty much stop on new tax breaks, Obama outlined a few more points:

• The Federal Reserve should be able to lend to state and local governments in order to increase liquidity on a local level.
• Unemployment benefits should be extended by 13 weeks. (Benefits would be exempted from income tax.)
• In addition to removing the early withdrawal penalty on up to $10,000 from retirement accounts, Obama proposes that seniors, on a temporary basis, not be forced into taking the minimum disbursement at age 70.5 to give accounts time to recover from the ravages of the stock market.
• A 90-day moratorium on foreclosures from institutions that take advantage of government bank rescue programs.

While I think that many of the measures proposed by both candidates would help ease things for regular people, I am a little wary of the idea of waiving early withdrawal penaties from retirement accounts. After all, now is not a good time to draw down what capital remains in the account. I am also wary of extending unemployment benefits, as well as skeptical about how much slashing the long-term capital gains tax would actually benefit ordinary folk.

What do you think of the proposals offered by the presidential candidates?

Post from: EveryJoe

Barack Obama and John McCain Share Economic Proposals