What to give:
So you've narrowed down the beneficiary of your
largess. But in what form should your gift be? The
majority of Americans--the nearly two thirds of
givers who don't claim tax deductions--simply
make modest donations, a practice most nonprofits
appreciate. "Our mainstay since 1917 has been
lots of small donors, not a few very large, wealthy
donors," says Father Flanagan's Swindell.
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Folks forking over substantial sums might
consider a planned gift. Start a charitable gift
annuity, for instance, and earn an income off your
donation. Return rates, calculated in part on
actuarial tables, rise with age (a 55-year-old earns
5.5 percent, while those 90 years and over get 11.3
percent).
Gloria Clinton, a 64-year-old
property manager in Salinas, Calif., used the sale
of a condominium in 1999 to fund a charitable
remainder trust with the Rotary Foundation. She took
a partial deduction for the $150,000 sale price and
now receives an annual income of 6 percent. When she
and her husband pass away, the remainder goes to
Rotary. "I wanted to do something that would
help others eventually," says Clinton. "I
don't like the stock market. I like knowing
I'll get a guaranteed rate of return."
If you'd rather spread the wealth, consider a
donor-advised fund. Community foundations have been
offering these vehicles for decades, but many
finance firms got into the game in the 1990s. Donors
to Fidelity's Charitable Gift Fund, for
example, make an irrevocable gift of at least
$10,000 (Vanguard's Charitable Endowment Fund
minimum is $25,000). The giver gets an immediate tax
deduction for the amount, then makes grants from the
fund at leisure. Gibbs LaMotte sold a real-estate
consulting business in 1997 and put over $150,000
into a Vanguard charitable fund. Now the 62-year-old
and his wife use the cache to make gifts each year
to a number of nonprofits. "It's like a
parking space for the money while you figure out who
to give it to." Most fund programs let you pick
from among several types of investment pools.
Vanguard's Total Equity pool, for instance, has
returned 17.38 percent year to date.
Money
isn't everything. Many cash-strapped groups
seek used computers. A list of them can be found at
www.sharetechnology.org. For your privacy, be sure
to erase the hard drive, and get a receipt from the
group for tax purposes. Cellphones can also be
recycled. Send your old mobile to CollectiveGood in
Tucker, Ga., and designate a charity from the list
at www.collectivegood.com. CollectiveGood will send
half the phone's resale price ($3 to $4) to the
charity.
No matter the item, you can deduct only
its fair market value, or the amount it would fetch
for sale. Determining the worth of low-value items
is up to you. The Salvation Army posts a helpful
guide at www.salvationarmy.org (sofas can fetch from
$35 to $200; children's sweaters, $2.50 to $8).
Be honest about the item's condition. Every
year, the northeastern division of the Salvation
Army spends $4 million disposing of broken and
unusable refrigerators, computers, and tires.
"If you wouldn't give it to your best
friend or your neighbor," says Lt. Col. Timothy
Raines, "then we probably can't use it
either."
