Monday, January 18, 2010

Charitable Giving - Do's, Don'ts, And Cautions

Charitable Giving is a cornerstone of a compassionate citizenry. Yet, it's very important that you know what you can, and can't give, and how to best give.

First - legally, if you designate a specific disaster (for example, Haitian relief) the organization is obligated to spend those funds on Haiti only. Guess what? In a few weeks, there will be another disaster, and if the organization recieves an excess amount of funds earmarked for one disaster - so much so that they can't spend it (guess what - this happens a lot!) they can't transfer those funds to other needs, so don't earmark your donation for a specific incident, let the charity manage their funds as they best can.

Second - your time is NOT a tax-deductible donation. Even if you have an hourly rate of $100, or a rate for an assignment for a charity documentary project of $750 for each day you are doing that type of documentary work, you cannot donate your services and take a deduction for that. If you incur airfare/hotel/food/shooting expenses during the trip, those you can deduct. (For more information on what is, and is NOT deductible, check out IRS Publication 526 - page 6 is where is says "You cannot deduct as a charitable contribution - 4. The value of your time or services,...")
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Third - make sure your donation is to a true charitable organization, and check them out! For example, making a donation to the Government of Haiti is NOT a tax deductible donation! Further, while everyone from the First Lady to Price Club are encouraging you to donate to the Red Cross, here are a few facts about them you should be aware of:
Red Faces At The Red Cross - In the hours after the Sept. 11 attacks, a record-breaking amount of donations started pouring into more than 1,000 local American Red Cross chapters. What donors didn't know was that some of the chapters entrusted with all that money had been identified by Red Cross headquarters just a few weeks before for having poor accounting procedures, inaccurate financial reports and for keeping national disaster contributions that should have been sent to headquarters in Washington.

Red Cross defends handling of Sept. 11 donations - "Don't confuse us with the 9/11 Fund in New York. Don't confuse us with Habitat for Humanity. Don't confuse us with the scholarship in New York for the victims. We have to get that out," [Healy] said. Controversy over the Liberty Fund was one reason Healy decided to resign at year's end.

Red Cross Blinks - The Red Cross had planned to use about half of the Liberty Fund to build up blood supplies and prepare for possible future terrorist attacks...The public responded with outrage to the disclosure that not all of the donated funds were being spent on victims of the attacks. "I donated money three times for the people directly affected by the attack on America, Sept. 11th. I did not donate money for the Red Cross to use as they wished.
It may be that your local church group, or a specific group, like the one photographer Cameron Davidson supports both with his time and money - The Community Coalition for Haiti, are a better destination for your donations. Just because everyone is championing one cause or another, doesn't mean you should take the easy path and do the same - figure out what you want to give, and how to best do it. Experts are saying that financial donations are best because if you, for example, donate bags of food or clothing, they may not only not be needed, but also, the costs to get them down there could be quite high.

It is important too, to realize that most people have a mindset of "I can give $x amount this year to charity..." and when they give that much, they don't give again for awhile. In the year after September 11, 2001, charitable organizations were reporting sharp drops in donations, because much of what people had planned to give to, say, research for a specific disease, or homelessness, was instead given to 9/11 charities. So, as you give for the current disaster - Haiti - remember your other charitable giving and don't make it an either/or - do both, if at all possible.

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