‘Tis the season for giving! Giving back is part of who we are at CPS IBEW Federal Credit Union. We love helping our members discover new ways to make our community and beyond a better place to live and thrive. As with every financial decision, though, you should put some deep consideration and planning into your charitable giving. Start with the ABCs: always do your research, budget your giving, and consider tax changes.
Always Do Your Research
Charities are businesses: Some spend too much on administrative costs or aren’t transparent with their funds while others are downright fraudulent, says Consumer Reports. They recommend researching before giving using a charity watchdog site like Charity Navigator and Charity Watch, which assign nonprofits easy-to-understand scores based on factors like financial health, accountability, and transparency.
When you research the organization, pay close attention to the exact name of the organization given to you. Rip-off charity scams often exploit name confusion to their advantage. They use names that include keywords like “red cross,” cancer research institute,” and “wounded warrior” to trick their victims into believing they’re giving to well-known, legitimate nonprofits. Don’t be fooled. Consider these helpful tips by Charity Watch instead.
Budget Your Giving
You don’t need to be a millionaire to make a difference with charitable giving, but it does help to plan ahead and make it part of your budget. Consider automatically debiting your regular monthly donations from your checking account to save yourself time and to avoid missing contributions you intended tomake. Need help setting up direct deposit? Call us (210) 353-2376. Want to make a yearly donation to your favorite charity but are cash-strapped? Applying for our Skip-A-Pay program on your CPS IBEW FCU loan can help you redirect those funds for one month each year to be donated instead. Donations from IRAs and other retirement funds are also possible and might be worth considering with the help of a tax advisor.
Many nonprofits need volunteers as much as they need monetary funds. When you find you have more time than money, ask your favorite charities what volunteer assistance they may need. Even helping just a couple of hours a month can make a big difference, and it can also be an excellent way for your family and friends to spend time together.
Consider Tax Changes
The Tax Cuts and Jobs Act of 2017 (TCJA) changed the way most taxpayers can deduct charitable donations. With a higher standard deduction threshold of $24,000 for married couples filing jointly ($12,000 for single filers), an estimated 87% of taxpayers no longer have a compelling reason to itemize deductions and, therefore, aren’t eligible for extra tax savings. But if you come close to that threshold—or significantly give each year—it can be worth talking to a tax advisor about ways to maintain a taxadvantage. Some taxpayers “bunch” donations and other deductions into targeted years, for instance.
Keep in mind, also, that tax laws change all the time. Even if you don’t qualify for extra deductions, it’s still important to keep track of your donations and ask for tax receipts when giving to your favorite nonprofits, including when you donate household items and clothing to charities like Goodwill. And keep in mind that only 501(c)3s in good standing qualify for tax-deductible giving. Giving to individuals through crowdfunding sites like GoFundMe and giving to political campaigns or sports clubs do not qualify.
We know you have a generous spirit, and we love that about you! Sometimes it just takes a little knowhow to put those great intentions to work in the best way possible. Happy holidays and happy giving!