Taxes

Making the Most of Charitable Donations

If you’re wondering how you can give back during the holidays, here are a few ways for making the most of those donations.
college volunteers in a food drive
By Christie Petersen
Updated on: February 15th, 2022

December is a month that is all about giving, so it’s no surprise that it is also the busiest month for most charities and non-profit organizations. According to a report from Indiana University’s Lilly Family School of Philanthropy, more than $471 billion was donated in 2020.

The report offered a few surprises. Even through COVID and a recession, giving grew from the previous year. Usually, researchers see giving staying the same or declining during times of recession. Giving to human support and racial equality organizations surged, while organizations that rely on in-person participation for fundraising saw a decline in the amount of money raised. Medical relief organizations that raised funds for COVID relief also fared well. If you’re wondering how you can give back during the holidays, here are a few ways to make the most of charitable donations.

  • Find the right charity or organization for you. Sites like Charity Navigator and Charity Watch can help you find an organization nearby or one with your cause in mind. It’s easy to know what “big” charities are out there, but the smaller non-profits and charities need your help too.
  • Take a look at expense ratios to make sure your donation is going to the cause above all. As with any other company, there are workers to be paid and costs to be covered. Try to find an organization whose expenses are less than 20% of their budget. You should be able to find this information on the nonprofit or charity’s website. If they are in your area, consider visiting their offices to learn more about them.
  • If you are giving a monetary gift, use a check or donate online using your banking information. Giving with a credit card could cause the organization to pay processing fees so your donation could be much less once it clears. If you are giving online make sure you protect your identity whenever you’re entering in your personal banking information.
  • Always get a receipt to deduct your contributions during tax season. If you make a donation of over $250 the IRS requires you to have a receipt.
  • If you can’t give money, give what you can. No matter if you are giving away used clothing, participating in a food drive, or volunteering at a soup kitchen — anything helps.