Giving Tuesday: What to consider when donating to charitable organizations
Today is Giving Tuesday, meant to encourage charitable donations throughout the holidays. Americans, including companies and foundations, gave an estimated $427 billion to U.S. charities last year. But with the rise of charitable scams, including fake charitable organizations that use tax deductions as bait, CBS News business analyst Jill Schlesinger offered some tips to consider as you spread your holiday generosity.
Check that the organization is legitimate
Use IRS.gov's search tool for tax exempt organizations.
"You can pop the name in of the charity and you can see is this a charity recognized by the IRS, does it have an identification number? And I think this is incredibly important. You just don't want to willy nilly start sending money in because ... there has been a huge uptick in charitable scams," Schlesinger said.
Organizations might have believable names or could be phishing for your information.
"A lot of these people get on the phone, they'll try to get your personal information. You never want to give any information out about yourself. You don't want to give wiring instructions. Sometimes they're literally saying give us your bank account information. We will draw that money from your account," Schlesinger said.
But don't fall for it. If you feel pressured, ask them to send information in the mail.
Do your research
Your dollars may not go far if some charitable organizations have a lot of overhead. Schlesinger suggested using resources including the Better Business Bureau, Charity Nagivator, Charity Watch, GuideStar and GiveWell.
"These are all organizations that are trying to see how much of your dollars go to the programs versus the overhead," Schlesinger said.
Check the tax benefits
Schlesinger said there can be tax benefits to giving, but not always.
"The tax benefit has to be if you actually itemize your deductions. Now remember, the new tax law went into effect. And we actually raised the limit of the standard deduction. Well, if you are claiming the standard deduction, you can't claim your charitable contribution. That means only 10% are actually able to write off their charitable contributions," Schlesinger said.
She said you can consider bundling your deductions into one year.
"That might get you over the threshold to be able to claim the charitable deduction," Schlesinger said.
Last word of advice
"Be careful. Don't go crazy. Give if you can give. Don't feel compelled to give," Schlesinger said.
