Giving Options

Determining how much to give to charity is a very personal choice. The only legal requirements for giving levels relate to private foundations, which are required by federal law to pay out annual grants totaling a minimum of five (5) percent of their assets.

Individual Giving Levels
The appropriate charitable giving amount will differ for every person. Deciding how much to give to charity can be influenced by many factors including your family situation, retirement goals, as well as your personal values and passions. A professional advisor can help you determine your appropriate charitable giving level. In addition, here are a few resources that may help you get started:

NewTithCalc Personal Giving Calculator
To receive a customized profile exploring giving levels that may be appropriate for you, try the “NewTitheCalc” personal giving calculator, developed by the Newtithing Group.

Newtithing Group
The Newtithing Group is a philanthropic research organization founded to encourage individuals and institutions to increase their charitable giving, by helping prospective donors determine their ability to give based on current income, investment assets and expenses.

Corporate Giving Levels
A company’s decision on how much to give to charity can be influenced by its annual profit levels, long-term strategic giving goals, business priorities, and a host of other factors. Some companies target a specific percentage of their pre-tax profits to donate to charity each year, others do not.

Options for Cash Contributions

• Direct cash donation
  A direct cash grant is the most common type of contribution. A company can deduct charitable grants from corporate taxes up to 10 percent of pre-tax net profits. In addition, there are several techniques you can use to increase the impact of a small charitable giving budget while encouraging giving from other sources, including employees.

• Employee matching gifts
  Matching gifts programs are an easy way for a business to support the organizations and causes that are important to your employees. When an employee makes a donation to his/her favorite charity, the company matches that donation dollar for dollar, up to a specified limited in a calendar year.

• Dollars for doers
  If your employees are active volunteers, one way to reward their efforts is through a dollars-for-doers program. This giving program makes cash grants to organizations where employees volunteer a certain amount of time.

• Challenge grants
  Challenge grants are a specific grant making strategy designed to leverage additional resources for a project or program. The company makes a grant on the condition that the recipient raises funds from other sources, usually within a certain time period.

Options for Non-Cash Contributions

There are several ways your company can support causes and organizations in addition to cash grants. Offering non-cash giving options enables your company to better achieve its program goals and meet more community needs than can be met by cash giving options alone.

• In-kind contributions/donations
  Donations of goods and services can expand your company’s charitable giving. These contributions can consist of products, suppliers, property, or excess inventory. They can also include services such as printing, website development, and use of meeting rooms. In-kind gifts are tax-deductible within certain limits.

• Loaned Talent
  You may offer the time and expertise of employees, allowing them to help an organization on company time. Employee “loans” can be either for single events or projects, or on a regular, longer term basis. This type of contribution provides nonprofits with expertise to which they would not ordinarily have access and increases your employees’ leadership skills and understanding of community needs.

• Employee engagement
  There are many ways to engage employees in workplace giving opportunities, ranging from the United Way and other campaigns, to sponsoring company teams in fundraising walks and runs, to encouraging employees to volunteer in a company-sponsored initiative. You may or may not decide to link employee volunteerism to the company’s business goals; many small companies simply encourage employees to volunteer in their own communities.
  
  
• Publicly Traded Securities
  You can transfer ownership of appreciated securities owned for at least one year to a charity and receive a deduction for the average value of the security on the day of transfer. When the security is sold by the nonprofit, neither the donor nor the organization will have to pay capital gains tax. You receive the benefit of having your gift valued at fair market value, including the appreciation, for the purpose of determining your charitable deduction.
  
  
• Life Insurance
  By designating a nonprofit as the beneficiary of a new or existing life insurance contract, you can make a significantly larger charitable gift than may be possible out of your current assets. And, if you make a charity the owner of the contract, you can deduct the premiums as you pay them. Or, if you would rather retain the right to change beneficiaries on the contract and don't care if you can't deduct the premium, you can remain owner of the contract and simply name the charity as partial, sole or contingent beneficiary.
  
  
• Real Estate
  You can make outright gifts of real estate to a charity. If you have owned the donated property for at least one year, both you and the charity can avoid paying capital gains taxes on the appreciation in the value of the property. Outright gifts of real estate will often result in an income tax deduction equal to the fair market value of the property, as determined by appraisal, but there are some situations where this may be reduced.
  
  It is also possible to make a gift of your personal residence, vacation home, or farm to a charity and retain a "life estate" in the property, allowing you to retain rights to use or rent out the property during your lifetime. You deed the property directly to the charity subject to your retained life estate, receive an immediate income tax deduction for a portion of the appraised fair market value, and have the comfort of knowing that the property will be excluded from probate.
  
  
• Personal Property
  Personal property, such as artwork, cars, clothing and jewelry, can be given to charity. However, unless the charity will actually use the property in connection with its stated mission, you can deduct only your cost basis, not the fair market value, of the property. Always ask how your gift will be used. If the property has depreciated in value from the original cost (typically the case with cars and clothing) then the deduction will be at its current value.
  
  
• In-Kind Gifts and Pro Bono
  In addition to cash contributions, some companies donate their products ("in kind" gifts) or offer their services on a free ("pro bono") basis to various charitable organizations. Many companies have products that can be used by nonprofits, including products from current inventory, obsolete merchandise, returned or slightly damaged goods, computers or office furniture and equipment. Nonprofits can also benefit from services provided by a company or its employees, such as printing, legal representation or publication design. A company's charitable donation of its products can qualify for a charitable deduction. However, limitations exist on what and how much can be deducted. The rules are complicated and require careful prior analysis by corporate or outside counsel. The value of staff time donated to a nonprofit organization is non deductible, although out-of-pocket expenses such as gas, mileage, meals, etc. for such volunteer work may be deducted within certain limits.
  
  
• Volunteer Time
  In addition to giving dollars, one of the most important ways to help nonprofit organizations in your community is to give of your time. Nonprofit organizations are in great need of capable, committed volunteers, and your volunteer contributions can leverage the financial contributions you make to an organization.