Money Monday: Your Holiday Charity Donations

african american female hands with paper family

There are an estimated 1,000,000 plus combined churches and non profit organizations operating in the United States of America. During each holiday season they remind us and encourage us to open our hearts and wallets for those in need. But with so many organizations from which to choose, how do you choose an organization worthy of your financial contribution?

Consideration #1: Exemption Status

Before making a donation to a charity be sure you verify that they are in good exemption standing with the Internal Revenue Service. Ensure that your favorite charity hasn’t somehow lost its tax exempt status according to the Internal Revenue Relations. You can verify their status by searching on the Internal Revenue Service website.

 Consideration #2: Unrestricted Donations:

When you donate to an organization you can decide whether to restrict how it uses your contribution. Unless you are really fixed on some particular project of the organization, consider making your contribution unrestricted. When contributions are restricted they sometimes limit the organization from investing in new ideas and casting new vision. Restricted donations may sometimes not allow organizations to pivot and even “harm-string” their operations in times of crisis–such as a pandemic. Restricted contributions take the decision of how best to use donated funds out of the hands of the organization’s leadership. Instead, it leaves those critical decisions  in the hands of the donors. While that may be seen as mostly positive, we have to allow room for trusting the organization’s leadership to do what is best.

Consideration #3: Cash versus Cargo

Giving cash is the preferred donated item over goods, clothing or something else. Besides the fact  that advancements in technology make giving cash easier, it may be more cost effective. For example, if you purchase an item to donate, you would likely have paid tax on that item. Your contribution would go much further since the organization would not be subject to sales tax in acquiring an item.

The other problem with giving cargo and not cash is that it provides the organization with resources that they cannot use. For example, an organization that receives summer items during the winter cannot use them, and may pay costs associated with the storage of these items. There may also be the additional cost of getting rid of those items which cannot be stored or used while having volunteers spend time engaged on less productive activities. Think of giving more cash over cargo.


Today’s What’s Up is about your holiday spending budget. Before you start your holiday shopping you should prepare a budget so that you don’t overspend over the holidays. But holiday givers often overlook a budget busters.  Say, for example, you plan to spend $75 on a gift for Cousin Broke. Most people only budget the cost of the gift but not the taxes or delivery costs. These may seem minor but they can add up and throw off your budget.  So this year as you prepare your holiday shopping budget, be sure to include the entire  cost of the gift in your budget. And that’s what’s up!



More from Ruthven Phillip
Money Monday: Say it Loud!
“Loud Budgeting” for Careful Consumers In 1968 James Brown released a song...
Read More
Leave a comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.