Business torrents

Charitable giving didn’t dry up with the recession, but it did become more selective.

You aren’t seeing donation pledges and checks tossed around casually in 2009. Instead, corporations and individuals alike are deciding what they care about most and directing their giving strategy accordingly.

That prudent philosophy has prompted nonprofit organizations to hold their friends close.

"We’re seeing board members and major donors being asked to contribute more this year, the general thought being that the more connected that donors are, the more they’ll give," said Nancy Raybin, managing partner at Raybin Associates, a New York-based fundraising consulting firm.

Eighty-one percent of corporate donors surveyed nationally by the LBG Research Institute said they’re donating more strategically in 2009. A 3 percent to 5 percent decrease in corporate and foundation giving this year is likely, according to analysis of the data.

"Environment, basic needs (food, clothing and shelter) and education were given by corporations as top priorities," said Donna Devaul, executive director for LBG Research in Stamford, Conn., which tracks corporate charitable giving. "But it looks like arts and culture will be hit hard."

Considering how financial markets tanked in 2008, it is heartening that charitable giving decreased just 2 percent, to $308 billion, from the prior year, according to the Giving USA Foundation.

Individuals, like corporations, must examine how well a cause or organization still fits their priorities and whether its results meet their approval. If an individual has favored charities, those charities probably need help more now than they have in many years.

"If you’re going to do meaningful charitable giving, it is important that you develop a plan for it," said Marilyn Capelli Dimitroff, president of Capelli Financial Services in Bloomfield Hills, Mich. "That means deciding where to give, knowing the tax considerations, keeping records and investing properly."

Individuals should check out any charity they are considering with the Better Business Bureau’s Wise Giving Alliance on its site, www.give.org, and also consult the American Institute of Philanthropy’s site, www.charitywatch.org.

Understand tax terminology no matter what the type of donation.

Tax-exempt means the organization doesn’t have to pay taxes, while tax-deductible means you can deduct your contribution on your federal income tax return no teletrack payday loan. Even if an organization is tax-exempt, your contribution might not be fully tax-deductible.

"If you’re buying a table at a dinner for a charity, that’s not 100 percent tax-deductible because there’s a value to the food you’re receiving," Capelli Dimitroff said. "Obtain a letter from that charity that documents how much was actually deductible."

Learn the basics, such as these on noncash contributions from Capelli Dimitroff:

— Get a receipt from the charity and keep reliable written records. Canceled checks can be used as a receipt at tax time.

— For contributions valued at $250 or more, you must get a written acknowledgement from the charity that follows IRS guidelines.

— The online guide to general values on the Salvation Army site, www.salvationarmyusa.org, is a good resource for assessing appliances, clothing, furniture, household goods and miscellaneous items.

— Photograph what you’re donating. Lay out everything, take a photo with a digital camera and store the file.

Donations should be a component of your overall investment and tax strategy.

"One very convenient, straightforward way to donate on a regular basis is through donor-advised funds," said Capelli Dimitroff. "You open a charitable account in your name or your family’s name and can donate securities to it."

A donor-advised fund (also known as a charitable gift fund or charitable gift trust) lets a donor make a contribution to a special fund and take a tax deduction. At some point, the donor advises the fund of a nonprofit organization or organizations where that money is to be directed.

This lets the donor manage charitable giving like a foundation without the expenses typically required in setting up a foundation.

The money is invested for the best return while the donor decides where to donate it. The contribution to the fund is tax-deductible as a charitable contribution in full in the year the contribution is made.

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