How to Use Your Smartwatch for Online Donations to Charity
Best and Worst Charities for Your Donations
Tax-Smart Ways to Give
Itemization vs. Standard Deduction
Taxpayers may choose to take the standard deduction, which is a set deduction that does not rely on the specific details of giving and spending throughout the year, or they may choose to itemize and add up all qualifying deductions, including charitable contributions. If you are unsure whether or not you will be itemizing, find out. Those who take the standard dedication will not need to track their giving.
If you are itemizing your deductions, keep reading to find out how to maximize your benefits.
What Counts?
Different types of organizations within the charitable sector have different legal designations.For tax purposes, the type of organization you give to matters. One of the simplest ways to ensure that your donation will be tax-deductible is to make sure you are donating to a registered 501(c)(3). Donations made to individuals do not count. Charity Navigator uses Form 990, which all 501(c)(3)s are required to submit to the IRS to rate organizations. Therefore, any organization you find rated on Charity Navigator is a qualified 501(c)(3).
Once you have decided on a nonprofit (or nonprofits) to support, ensure you obtain a receipt as proof of donation. You cant deduct what you cant prove! Your receipt should indicate that it is a donation, usually with a phrase like, ...no goods or services were exchanged This shows that you did not purchase anything, an important distinction because purchases from nonprofits are not tax-deductible. For example, if you donate clothing and furniture to Goodwill or make a cash donation to their program, that is tax-deductible. However, if you purchase clothing or furniture at Goodwill, that expense is not tax-deductible.
When to Give
Charitable contributions provide an income-tax deduction in the calendar year they are given (January 1st - December 31st). To maximize your benefits, consider your tax burden and how it might change from one year to the next. Giving your donation just before or just after the New Year may mean a significant difference in your tax bill. The change may not matter much to you, but this is worth noting. Keep in mind that itemized charitable tax deductions are limited and cannot relieve your entire income tax burden.
Beyond Cash
Experienced givers are likely well-versed in the standard practices of donating cash to charities, but there are other ways to give that may make more sense for your situation.
- In-Kind Donations: Donated items that are useful and in good condition can also count toward your tax-deductible contributions. Learn more.
- Donor-Advised Funds (DAFs): DAFs are an excellent way for donors to give without committing to a specific cause or organization. Tax deductions are distributed for the calendar year that contributions are made to a DAF, so donors can put money in and watch it grow before distributing the funds. DAFs can also help you donate various assets at once, making them a convenient and streamlined giving vehicle. Learn more.
- Cryptocurrency: Owners of cryptocurrencies and NFTs can reap tax benefits from donating these holdings directly to nonprofits, but circumstances dictate how much you can benefit. If you are not already in the crypto market, donating is not a good reason to jump in. Learn more.
- Appreciated Stock: Your unrealized capital gains can do a lot of good for a charity while taking a bite out of your long-term capital gains taxes. In the case of highly appreciated assets, these tax savings may exceed the amount initially paid for the investment. Consider rebalancing your portfolio by donating appreciated stock. Learn more.
- IRA Required Minimum Distribution (RMD): The RMD is the smallest amount of money account holders must withdraw from employer-sponsored retirement plans each year once they reach retirement. If you fail to meet your RMD, the amount not withdrawn will be taxed at 50%. Donating your unneeded RMD is an opportunity to lower your tax bill while doing good. Learn more.
Every donation has meaning, but by maximizing your tax benefits, you can ensure you are giving as much as possible to the causes that matter to you. Which strategy will help you do the most good?
Disclaimer: This information is provided as a public service to highlight a matter of current interest. It does not constitute a full review of any subject matter nor act as a substitute for obtaining financial or legal advice from an accountant, financial advisor, or attorney.
The Top 5 Ways to Accept Donations Online
We all appreciate things that make our lives easier, from delivery apps to mobile wallets to smart home technology. Fundraising is no exception. Online donation tools give people a convenient way to show their generosity, whether they live down the street or across the world. If youre looking to fundraise and accept donations online, you should know which tool is best suited for your needs. In this guide, well break down what to look for in an online crowdfunding platform so your fundraising experience is quick, simple, and impactful.
Start a GoFundMe
5 easy ways to accept donations online
Once you decide which features are most important for your situation, you can start evaluating different platforms for online giving. Here, we break down four of the most popular online donation tools and the best way to accept donations online to save you time.
1. PayPal
PayPal is a secure payment processing system that allows users to accept donations online. In order for donors to send a donation to your account, donors need to know either your phone number, email address, or contact name.
Unfortunately, PayPal does not offer a section where you can post your story and photos to encourage donations. It also requires donors to use their personal PayPal account. This can be advantageous for existing PayPal users because they dont need their credit card information to make a donation. On the flip side, it could deter donors who are forced to make a PayPal account in order to contribute.
2. GoFundMe
GoFundMe is a crowdfunding platform that is specifically designed for accepting donations online. But what sets it apart from the others on this list is the storytelling feature it offers to community members. Through GoFundMe youre not only requesting donations, but sharing your needs, dreams, and ambitions with your network through photos, videos, and the campaign story itself. Out of the four platforms listed here, its the only one that allows you to:
- Create fundraising goals
- Feature your story
- Accept donations without creating an account
- Thank donors personally
- Update donors with photos and new developments
Donors have the flexibility of donating on their mobile device or computer. They can also share your fundraiser on social media with the click of a button. If you already have the other donation options and want to make that information available to donors, simply add your payment handles in your fundraiser description. That way, donors can choose whatever option is most convenient for them and encourage even further giving. Wondering how do I ask for donations online? Our blog post on how to ask for donations will teach you in a few simple steps.
Fundraising for your favorite charity
GoFundMe also makes it easy for you to raise money and accept donations online for your nonprofit. When you are fundraising for a nonprofit organization, select which charity youd like to support. All donations to your charity fundraiser are tax-deductible and go straight to the charitys bank account, so you dont ever have to worry about handling the funds.
3. Venmo
Like PayPal, Venmo is a user-friendly, no-frills payment platform. In addition, Venmo also doesnt have a section to share your fundraiser story and post photos. To get started, all you need to do is download the mobile app to your smartphone or tablet. Compared to other platforms, it accepts most types of foreign currencies. Donors can easily search your Venmo username and send you money within seconds.
However, donors may incur a fee if they use a credit card. Generally, this isnt an issue because most users connect their debit cards to avoid additional costs. Another limitation is that Venmo requires donors to have or create an account. Keep in mind that Venmo is only supported on mobile devices or tablets. This may discourage certain users, especially if they dont have a smartphone or tablet.
4. Cash App
Venmo and Cash App are virtually the same, with minor differences. One similarity is the inability to share your story and images. While recipients have no receiving limits, donors can be restricted based on which platform theyre using.
Even if youre not anticipating donations to exceed the limits set by the apps, keep in mind that donors might rack up a hefty weekly total for personal reasons. Many use these apps to pay rent, reimburse their friends, and more.
5. Zelle
Zelle, a digital payments platform, is similar to PayPal, Venmo, and Cash App. The difference is that you need to have a bank account in order to use it. You can send money to anyone who also has a US bank account. If your bank offers Zelle you can enroll through your mobile banking app. If not, you can enroll through the Zelle app. While money is usually transferred within minutes, there are sending limits through Zelle. However, like the other payment platforms, you cant add a fundraiser story or photos, which are good to have for online fundraising.
What to look for when evaluating online donation tools
We live in a world of options, where you can pick and choose depending on your needs. While this is generally regarded as a good thing, what happens when youre flooded with choices? How can you possibly make the best decision when trying to collect donations online?
To help you weigh your options, we created a list of key features when selecting a donation platform. This way, youll be able to pick the best platform for your needs.
Cost
Depending on your needs, you may not be able to shell out money for a paid giving platform. Depending on the type of platform you use, youll want to check out the pricing and fees before you decide.
Ease of use
Time is money. Two hours spent navigating an online giving platform is two hours that could have been spent collecting donations. Before committing to a specific donation platform, determine how easy it is to use, if it has a good mobile app, and if the sharing tools are simple to use.
Showcasing your store
A successful fundraiser is dependent on an honest and compelling story. Does it move people to give to your cause? If donors understand the impact of their contributions, they will be more likely to give to your cause and share your fundraiser with their networks. Look for online donation tools that can give your story the attention it deserves.
Ways to share
Leverage the power of your networks to spread the word and encourage donations. In recent years, social media has become a popular and easy way to share your fundraiser with others. Does your donation platform make it easy to share on social media?
If youre uncomfortable sharing your personal fundraiser on social media, there are other ways of fundraising without social media. Choose whichever method makes you most comfortable.
Customer service
See what customer service options your desired platform offers. Does it offer phone, email, or chat support? What type of response times should you anticipate? Even if you dont anticipate roadblocks, its better to be informed when things dont go as planned.
What you need to have on hand to receive your donations
In order to receive funds from your GoFundMe, youll need to have a few pieces of information available. This is to ensure the funds are going to the right person and the right place. Here, we outline what documents youll need to withdraw your donations.
Bank account info
If youre raising money for yourself, this information should be pretty easy to locate. The most common way to find the requested information is to look at your checkbook or online bank documents. Please note that its important to double and triple-check your bank account information so there are no problems with your bank receiving the donations.
If youre raising money for someone else, youll need to add them as the recipient so they can withdraw the funds directly. Its as simple as sending them an email invitation. This will ensure that the donations go directly to them.
Raise more with GoFundMe
Whether youre raising money for yourself, a friend, or fundraising for a charity, GoFundMe is here to help. What makes our powerful platform stand out is the ability to share your story with compelling photos and videos. Through storytelling and our fundraising tools, you can reach more supporters, encourage more donations, and build stronger relationships with the people who want you to succeed. Moreover, our Customer Care team is ready to answer your questions and offer expert advice along the way. Take advantage of our fundraising expertise and launch your online fundraiser today.
Start a fundraiser
