Claudia Buck

Holiday giving: What to know before you donate

The holiday season is a time of charitable giving, when we open our hearts – and wallets – to those we want to thank, encourage or acknowledge. And just maybe take a tax deduction, too.

Whether it’s tipping your mail carrier and hair cutter or donating to your favorite charity, there’s no end of people and organizations who are in our gifting sights.

Last week, many Americans got a head start by donating online to their favorite charities during “#Giving Tuesday.” The annual event, created three years ago by United Nations Foundation and 92nd Y and widely circulated on social media, raised at least $45.7 million this year, according to initial tallies.

That’s up roughly 65 percent from 2013, according to the Giving Tuesday website – an indication that consumers are feeling a little freer with their ability to give this year.

“It has eased quite a bit. People are doing better; budgets aren’t quite as tight as they were a few years ago,” said Lisa Gerstner, contributing editor for Kiplinger’s Personal Finance magazine. She and other experts have some basic tips for holiday giving.

Be sure it’s OK

Not everyone can accept a gift. Some employees, like those at certain retirement centers or nursing homes, are prohibited from accepting cash or gifts. Ask the company supervisor.

Other categories of workers, like U.S. Postal Service workers, cannot accept gifts worth more than $20. Under federal regulations, even gift cards that can be exchanged for cash “are not permissible” as a way to thank your carrier, said U.S. Postal spokeswoman Sue Brennan, in an email. But, she added, “gift cards for restaurants, stores, malls, etc. are all good, as long as they can’t be exchanged for cash.”

If monetary gifts are a no-no, you can always give a plant, flowers, food gifts or a homemade treat.

And always ask if your employer will match your charitable contribution, which can stretch your giving.

Check the charity

Everyone knows the legitimate charities: your local food bank or homeless shelter, the American Red Cross, SPCA, Salvation Army and zillions of others. In California alone, the state Attorney General has 90,000 charities registered as tax-exempt, nonprofit entities.

But especially during the holidays, consumers should be wary of look-alike, sound-alike pitches from those trying to mimic legitimate charities. They might send an email with a www. address that is one or two letters off from the real charity’s name, like SPCAA, instead of SPCA.

“There’s a lot of impostors out there who use fake names that sound like the real thing. They’re trying to separate you from your hard-earned money,” said Gary Almond, president of the Northeast California Better Business Bureau, based in West Sacramento. He also advised to be wary of charity solicitations by callers purporting to be raising money for sympathetic causes such as senior citizens, children and veterans groups that may – or may not – be legitimate.

“A lot of these are boiler rooms, and the recipients never receive the money. You really have to know who you’re giving to,” said Almond.

That’s why it’s especially important to do a little homework before you write that check or hand over cash.

“Don’t assume that charity recommendations on Facebook, blogs or other social media have been vetted. Research the charity yourself,” says the state attorney general’s office website.

You can check a charity’s rating on a number of online sites, including the AG’s website, oag.ca.gov/charities, CharityNavigator.org, GuideStar.org and WiseGivingAlliance.

“You want to see if the charity is well-managed and what percentage of its donations go to actual programs, rather than overhead or salaries,” said the BBB’s Almond.

Keep paperwork

If you’re planning to take a tax deduction, the IRS wants you to keep some paperwork. Taxpayers need a written receipt from the charity or a bank record in order to claim any donations. If you give something worth more than $500, you must have a written appraisal. Donations made by the end of the year, whether by check or credit card, can be deducted on this year’s taxes, even if your credit card statement isn’t paid or the check doesn’t get cashed until 2015.

If you’re donating household goods or clothes to charitable groups, you’ll need an itemized list with the estimated donation value of each item, which must be in good, usable condition. The Salvation Army, for one, keeps a donation price list on its website, Donation Value Guide.

A hand of thanks

Not everyone on your list needs to be thanked in cash or by check. Sometimes the best gift of all is in words or deeds.

Make a home-baked treat and pair it with a holiday card that conveys your thanks, said Kiplinger’s Gerstner. “Tell them what they do for you and why it’s special.”

Or lend a hand by volunteering at organizations like Christmas Promise, which fulfills basic wishes for needy families. “The time to get people engaged in charity is at a young age. You’re never too young to learn what it means and the effect it has,” said BBB’s Almond. “It’s why Run to Feed the Hungry (the annual Thanksgiving fundraising run that benefits the Sacramento Food Bank) feels better than just writing a check. You’re physically involved, getting engaged with it.”

Call The Bee’s Claudia Buck at (916) 321-1968 or read her Personal Finance columns at sacbee.com/claudiabuck.

Holiday tipping: What’s the right amount?

Here are Kiplinger’s suggestions for tipping the people in your life.

Mail carrier: A gift card to a store that’s under $20.

Newspaper deliverer: $10-$30. If you tip monthly or automatically as part of your subscriber account, just a few dollars at the holidays is fine.

Childcare provider: A week’s pay. Should be at the top of your list, since they work closely with you and your child.

Teachers: A cash gift can look like a bribe. But a small gift card or personal gift, with a note or drawing from your child can be a nice acknowledgment. Or pool your resources with other parents to buy a larger gift card.

Housecleaner: Cost of one visit, if they come to your house weekly or biweekly. If you use a service that works as a team, a box of candy for the team is customary.

Hairstylist/Barber: Cost of one visit. Consider a small gift for a stylist who doubles as a confidant.

Nursing home/Assisted living worker: Check policies with the institution to see if they’re allowed to accept gifts. If not, a plate of homemade cookies and a note of thanks.

Source: Kiplinger’s magazine

  Comments