Even during these tough economic times, many people still want to make
charitable contributions before the end of the year. But they may want some
advice about how to do it in ways that acknowledge the challenges they—and the
community—face.
- Focus on immediate needs.
Many nonprofits that
provide basic services, such as food, shelter, and healthcare, are seeing
reduced funding from public as well as private sources. These nonprofits are
experiencing large increases in demand for their services. Therefore this might
be a time to focus contributions, even if they are less than in previous years,
on organizations that support those most affected by the economic downturn.
- Give more strategically.
This is also a time to
think about being more strategic—for example, focusing on organizations that
serve the most people or are the most efficient. It could also mean giving
larger gifts to fewer organizations in order to make a bigger impact, or not
making end-of-year contributions to organizations with large reserves or
endowments, since they may not need contributions now as much as others with
tight budgets and increased demands.
- Give different assets.
In place of appreciated
securities, which people often give at year-end, they might consider giving
unneeded life insurance policies or an interest in a privately held company.
- Contribute retirement surplus to a charity.
For 2011, those over 70 ½ still may give surplus
IRA or qualified retirement plan assets (up to $100,000) directly to a
charity without having to recognize the gift amount as income.
- Turn holiday gifts into charitable donations.
We
encourage people to think about making donations to charities instead of giving
holiday gifts. The donations can be made in the name of the person who would
have received a traditional gift.
- Take the long view.
If they are
giving less—or not at all—this year, they may consider revising long-term
philanthropic strategy and setting five-year goals.
- Think about leaving a legacy.
Estate planning
discussions occur throughout the economic cycle. If they are doing estate
planning, they may want to plan bequests and therefore may want to become more
knowledgeable about specific tax-advantaged strategies to address the charitable
legacy they will leave.
- Assess financial realities and charitable
motivations.
Given the dramatic changes in the economy, their
charitable motivations may have changed. Can they “afford” to be more charitable
this year? If so, they may want to practice what’s called "countercyclical
philanthropy" — giving more when the needs are greatest.
- Think about other ways to give.
Instead of, or
in addition to, financial contributions, consider other ways to
help those in need. They could volunteer (there are lots of special opportunities
around the holidays, and volunteer centers in every community); and many
congregations and community organizations are aware of people with economic
challenges, so if they know of a job to offer or can provide temporary housing,
these are great ways to help. Think of it as sharing "time and talents" in
addition to "treasures."
- Ask for help.
Finally, The Minneapolis
Foundation is always available to offer advice on how to make charitable
contributions that meet both charitable and financial goals. In good times and
bad, we’re here to help people be as effective as possible in their charitable
giving, and to make a difference in the community.