When considering the option of charitable giving, emphasis is often placed on the direct gains from tax deductible contributions. There are other, more indirect benefits of giving to charity that are important to observe.
Consider your financial goals and learn to plan wisely.
Donating to a charity can help you learn how to manage your finances more effectively, and actually increase the amount you save. By establishing a set of goals or priorities, philanthropic giving affords valuable skills and develops better financial habits. Understanding yourself and what you believe in will help you plan more wisely for the future. Identify what is most important to you, and assign a realistic number to what you could give over a period of time.
Charter change and make the world a better place.
Every little bit helps. Just a few U.S. dollars can go a long way in other parts of the world.
Studies show that charitable donations in the form of prosocial spending, e.g. money spent on others or the act of charitable giving fosters social connection and compensates the donor in many ways.
More specifically, generous behavior precipitates a more positive outlook, sweetens success, and promotes higher levels of happiness.
Claim Donations & Collect Tax Benefits
Charitable donations are tax deductible when made to qualified nonprofit organizations.
On the list of top 5 tax deductions, the benefits of donating to charity are well documented and should not be overlooked. When you make a cash donation to a registered nonprofit 501(c)(3) organization, the amount of the donation can be listed and deducted from your taxable income. This will reduce your overall tax liability.
Another way to save on your taxes is to donate old items to charity. Less common than cash, donating goods is a way to make use of items you no longer want or need, and receive a sizeable tax deduction. The Salvation Army provides a valuable guide for determining the value of your donated items. Always get a proper, itemized receipt to keep on record for the IRS.
With the balanced approach characterized above, engaging in charitable work in your community, or giving money to a nonprofit cause is a way to invest in a more profitable future. In return for your investment in a better world, you will gain personal knowledge about yourself, your values, and how to save for a better financial future.