How to give wisely this holiday season

The holiday season is a time of joy, gratitude, and generosity. Many of us feel inspired to share our blessings with others, especially those who are less fortunate or facing hardships. Giving to charity is not only a noble act, but also a rewarding one. Research shows that giving can boost your happiness, health, and sense of purpose.

But how can you make sure that your donations are making a real difference and not falling into the wrong hands? Unfortunately, there are many fraudulent charities out there that prey on people's goodwill and emotions. They may use deceptive tactics, such as fake websites, emotional appeals, or high-pressure phone calls, to solicit donations for causes that don't exist or don't receive any funds.

As a real estate investor, you know the importance of doing your due diligence before making any financial decision. The same applies to charitable giving. You want to make sure that your money is going to a legitimate, efficient, and transparent organization that aligns with your values and goals.

Here are some tips to help you give wisely this holiday season:

Check the charity's status. Before you donate, verify that the charity is registered as a tax-exempt organization with the IRS. You can use the IRS search tool for Tax Exempt Organizations to find out if the charity is eligible to receive tax-deductible donations. You can also check the charity's rating and performance on websites like Charity Navigator or GuideStar, which provide information on the charity's finances, governance, impact, and accountability.

Do your research. Don't rely on the charity's name or logo alone to make your decision. Some scammers may use names or symbols that sound or look similar to well-known charities to confuse donors. Do some research on the charity's mission, vision, programs, and results. Look for evidence of how the charity uses its funds and what outcomes it achieves. You can also read reviews and testimonials from donors, beneficiaries, and experts to get a sense of the charity's reputation and credibility.

Be wary of unsolicited requests. If you receive an email, phone call, text message, or social media post asking for a donation, be cautious. Don't click on any links or attachments, or provide any personal or financial information, unless you are sure that the request is from a legitimate source. Scammers may use phishing or spoofing techniques to steal your identity or money. If you are interested in donating to a cause or organization that contacted you, do some research first and contact them directly through their official website or phone number.

Plan your giving. Instead of making spontaneous or impulsive donations, plan your giving ahead of time. Set a budget for how much you want to give and how often. Choose the causes and organizations that matter most to you and align with your values and goals. Consider the impact and tax benefits of different types of giving, such as cash, stocks, real estate, or donor-advised funds . Consult with your financial advisor or tax professional if you need help with planning your charitable strategy.

Follow up on your donation. After you make a donation, keep a record of it for your tax purposes. You should also receive a receipt or acknowledgment from the charity confirming your gift and providing information on how it will be used. Follow up with the charity periodically to see how your donation is making a difference and what progress they are making toward their goals. You can also sign up for their newsletter, follow them on social media, or attend their events to stay connected and informed.

Giving to charity is a wonderful way to express your gratitude and generosity this holiday season. By following these tips, you can ensure that your donations are going to the right place and making a positive impact on the world.

Thank you for being a valued reader and a generous donor.

Happy holidays!

Janet Behm, Tax Strategist