December 17, 2015
Written by Meghan Marsden Parsche, United Way Volunteer
According to Charity Navigator, charities receive an average of 41% of their contributions in the last few weeks of the year. So why do so many people give during this time period, and why should you consider making a gift to United Way before the end of the year? We asked Terry Riesterer, Vice President for Global Finance Operations at Rockwell Automation and a member of the United Way’s Finance Committee, to explain the three big benefits of year-end giving.
#1 Holiday Spirit
When the holiday season ramps up, charitable giving increases. “The season and its traditions are filled with messages of gratitude, generosity and a spirit of helping others less fortunate,” explains Terry. Inspired by the giving spirit, many people not only shop for gifts for friends and family, but direct their money to favorite charities as well. Holiday giving offers a wonderful opportunity to demonstrate to children gratitude and compassion for others. Choosing a charity together can be a bonding experience for families.
#2 Tax Benefits
“Year-end giving can also have a practical purpose as well,” says Terry. “As the end of a tax year approaches, individuals may be focused on their personal income tax planning.” For individuals who itemize deductions, a gift to a qualified charitable organization may allow them to claim a charitable contribution deduction against their taxable income. If a gift is deductible, it will reduce an individual’s taxes paid based on the income tax bracket they are in.
“For example, says Terry, “An individual in the 33% tax bracket would enjoy a $33 tax savings on a $100 charitable contribution.” It is important to note that donations can be subject to certain limitations and restrictions – Terry suggests consulting a tax advisor for specific questions.
#3 Sharing the Wealth
According to Terry, year-end bonuses may also play a role in the decision to make contributions in the last few weeks of the year. “Many individuals may receive annual incentive compensation bonuses at the end of the year and make decisions on charitable giving based on their award,” he points out.
Appreciated stock can also present an individual with an opportunity to share income while receiving tax benefits. “Donating appreciated property, for example shares of stock, to a qualified charitable organization may allow an individual to take a deduction on their income taxes for the full fair market value of the donated assets,” explains Terry.
The individual is not taxed on the appreciation, so in effect they receive a deduction for an amount that was never reported or taxed as income. This is a great way to maximize the value of a donation to the receiving organization, in a tax efficient way to the individual.
Make Your Year-End Gift
Donate now!
In order to be counted as a 2015 contribution and to qualify for a possible tax deduction, donations made by check must be mailed via U.S. Postal Service with postmark and check date on or before December 31, 2015.
Meghan Marsden Parsche is a proud United Way supporter, stay at home mom to her three young children, and volunteer writer for UWGMWC.
Meghan enjoys telling the stories of the programs and people making a positive impact on our community.