01/20/2010
Americans give – more than any other national group on earth. Even in the midst of the 2008 Grecession (as in Great Recession), charitable giving exceeded $300 billion, according to the AFFRC Trust for Philanthropy. Here are a few other interesting statistics:
• In 2008, charitable giving represented 2% of the GDP, down 2% from 2007.
• Individuals gave 75% of all gifting.
• The sectors that receive most: religious (local worship communities) and education
• All sectors EXCEPT RELIGIOUS declined in 2008 with human services charities taking the biggest percentage drop in donations
• In surveys, donors state that they want to make a difference or give back for what they’ve been given
Even though numbers are down, Americans have continued to give.
And in the horrors of this past week, we’ve proved it again – Americans are giving to Haiti. No matter how you feel about the governance of that nation or its ability to climb out of poverty, there are very few of us who do not want to respond in some way to the extreme level of suffering just miles from our border.
THIS IS WHERE THE TAX RELIEF COMES INTO PLAY. Two Democrats and two Republicans in the House have just announced their intent to introduce legislation that will allow us to take a deduction on our 2009 tax returns for donations made to Haiti relief in 2010. Usually you would have to wait until next spring to take the deduction since it was made in 2010. Gifts made after January 11, 2010 and before March 1, 2010 would be eligible to be deducted RIGHT NOW. We will try to keep you informed on this legislation, but it will probably pass. This is an incentive to be generous – we know you would be anyway, but this helps. PLEASE tell your tax preparer about donations you have made to Haitian relief.
The IRS has a few reminders about charitable giving on its web site: http://www.irs.gov/newsroom/article/0,,id=218226,00.html?portlet=7
Here is a recap for giving to Haiti relief:
• GIVE TO US ORGANIZATIONS = DEDUCTIBLE. Contributions to domestic, tax-exempt, charitable organizations providing assistance to individuals in foreign lands are tax-deductible, provided that the U.S. organization has full control and discretion over the uses of donations.
• GIVE DIRECTLY TO FOREIGN ORGANIZATIONS, INDIVIDUALS, FAMILIES = Not Deductible
• DOCUMENT YOUR CONTRIBUTION. “To substantiate charitable contributions of money, regardless of amount, a taxpayer must have a bank record or a written communication from the charity showing the name of the charity and the date and amount of the contribution.” CASH GIFTS without receipt are not deductible. US organizations generally receipt all gifts. For a gift of over $250, the charity MUST receipt you in order for the gift to be deductible.
• DEDUCTIBLE IN YEAR CONTRIBUTED. So when you make a gift in 2010, it will be deductible on your 2010 tax return, which will be filed next spring in 2011. EXCEPTION: IF LEGISLATION PASSES ALLOWING A CURRENT DEDUCTION FOR HAITI RELIEF GIFT.
Be careful who you are giving money to for Haitian relief. There will be scams – amazing, but true. Stick with organizations you know or that you can research on the Internet.
Remember that Haiti will be a long time in rebuilding. You might consider giving $10 or $20 or more per month to a favorite aid organization by automatic withdrawal or monthly credit card charge — easy and you won’t forget. Your credit card statement will document your gift.
PS — My friends at Compassion International would love for me to tell you that you can sponsor a little child in Haiti for $38 per month in an effort to break the cycle of poverty. It is a long term commitment but one with lasting joy (and it is tax deductible, of course). Read all about it at www.compassion.com.