Many Americans consider Thanksgiving and Black Friday to be the unofficial start of the Holiday season. What many Americans don’t know however, is that the Tuesday after Thanksgiving is internationally known as “Giving Tuesday.” Started in 2012 by 92nd Street Y and the United Nations Foundation as a response to commercialization and consumerism in the post-Thanksgiving season, “Giving Tuesday” has quickly caught on in the philanthropic community. Last year, a total of $274 million dollars was raised on “Giving Tuesday,” with several large charities and companies such as the Bill and Melinda Gates Foundation and Facebook offering limited matching to participating donations.
This “Giving Tuesday”, individuals should consider donating appreciated securities (stocks, bonds, mutual funds) directly to charity in the place of cash donations. Security donations offer the donor significant tax benefits over cash donations or selling your appreciated securities and contributing the after-tax proceeds to charity. When you donate appreciated securities to charity, you’ll generally take a tax deduction for the full market value and because you are donating appreciated securities you can save on capital gains tax that would otherwise be realized upon sale. Additionally, this will be the last year that individuals will be able to make non-cash donations (art, jewelry, etc.) without a qualified appraisal (see our September blog post for more information on these upcoming regulations, here).
Before making their donations, donors should utilize the Tax Exempt Organization Search tool that IRS provides on their website. The search tool provided on the website helps donors confirm that the organization they wish to donate to is tax exempt and eligible to receive tax-deductible charitable contributions. Donors can also see if an organization has had its tax-exempt status revoked for any reason in its history. If donors are confused as to whether their donation will be tax-exempt or not, they should consult the Interactive Tax Assistant, “Can I Deduct My Charitable Contributions?” which is also available on the IRS website.
With these tools and tips, donors can be sure to maximize their generosity and tax-savings this Giving Tuesday. From all of us here at Condor, Happy Giving!