If your budget is tight but you still want to give, here are a few ideas:
Give stocks or property. Review your portfolio or home for assets you can donate. If you’re looking to give a stock, the preferred method for donation will depend on whether it grew in value.
“If it appreciated, the key is to donate it as a security rather than cashing it out first,” said Kim Wright-Violich, president of Schwab Charitable.
This will let you avoid paying capital gains taxes on the stock’s appreciation. The donation can be written off at its fair market value.
Conversely, stocks that have lost value should be liquidated first, with a cash donation going to the charity. This will create a capital loss for tax purposes that can offset any gains.
To give away property such as art or a car, either you or the charity will need to pay for a third-party appraisal, Wright-Violich said.
The rules are complex, but generally you can deduct the property’s fair market value as a charitable donation so long as the charity is not selling the property for cash. Otherwise, you may only get to deduct what you originally paid for the property.
Offer pro bono work. The term “pro bono” is widely associated with legal services, but professionals in a range of fields have come to embrace its spirit.
“If you have a monopoly on a service, we think there’s a duty to help people who can’t afford it,” said Schickman of the ABA’s Standing Committee on Pro Bono and Public Service.
It’s a sentiment that’s caught on in other professions.
The Taproot Foundation partners with numerous trade and alumni associations to provide free marketing, human resources, IT and consulting work to nonprofits. The California Society of CPAs estimates about 25 percent of its 33,000 members provide free financial services every year, mostly to the poor.
Professional associations are a good starting point to learn about pro bono opportunities.
Buy products that give. Charitable giving can be a part of your everyday buying habits.
Susan G. Komen for the Cure partners with dozens of companies, including Lean Cuisine, Pepperidge Farm and Breyers Ice Cream, to raise money for breast cancer awareness.
In addition to benefiting all involved parties — shoppers, businesses and Komen — the promotions raise awareness about an important cause, said Karen White, a spokeswoman for the organization.
“You might be grocery shopping and it reminds you that you’re overdue for a mammogram,” White said.
Several other groups, including The Global Fund and the American Heart Association, partner with companies to raise money, particularly during the holidays.
Put a charity in your estate. Consider leaving assets to charities in your will. This will let you deduct the value of the donation from your estate, which is subject to taxes above a certain point.
If your loved ones are set financially, you might even want to make your favorite charity the beneficiary of your life insurance policy.
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