Charitable organizations may operate for any purpose deemed beneficial to the public interest. The Internal Revenue Code provides for over 30 different types of organizations such as religious, scientific research, medical research, education, and alleviating social ills. These organizations may be hospitals, churches, educational institutions, organizations such as the Elks, Kiwanis or Rotary Clubs, groups such as the Boys and Girls Club. Organizations must be federally recognized as an entity under IRC§ 501(c)(3) corporation, to make your donations tax exempt and to obtain the charitable deduction on your income tax-return.
Methods of Providing for your Charitable Interest:
Outright Gift: (Donation) to an established charity.
Charitable Remainder Trust: You irrevocably give the asset at your death for Tax reduction during life.
Charitable Lead Trust: You give away the income from the asset during your life, and the asset comes back to your designated beneficiary at the time of your death.
The above three are not the only techniques for giving; an estate planning attorney can help you investigate them. To get your donations, charities, and other non-profit organizations, must earn your trust that the organization will use the gift for its intended purpose. It is essential to investigate each organization you will support, even if the organization is well known.
Recommendations on charitable giving from
State of California Office of Attorney General:
- Do your research before you give to any organization.
- Refuse high-pressure deals.
- Ask for written documentation about the organization.
- Call the charitable organization.
- Be aware of similar-sounding names.
- Do not send cash, ever.
- Be wary of any organization that is willing to pick up cash donations.
- Be wary of solicitations on behalf of the police, firefighters, and veterans.
- Make sure your charitable donation is tax-deductible.
- Make sure to keep the correct records and get them to your tax professional.
- Consider other forms of giving: Volunteer your time, expertise, and talent.
