Audio Version: Let Me Hear It!
The hustle and bustle of the holiday season is in full swing. The coming weeks will be filled with list making and meal prepping, last minute shopping and endless holiday parties. Before you’re knee-deep in holiday recipes and commitments, we want to remind you that the end of the year is also a time for reflection, family, and gratitude.
Many people use this time to teach their children that an important part of being good stewards of wealth is sharing with those who are less fortunate and supporting charitable causes. There are plenty of different ways to ‘share the wealth’ during the holiday season, and oftentimes you don’t have to go too far to meet your philanthropic goals.
One way to get children involved in philanthropy is to sponsor a child their age in another country through a program that encourages an on-going pen pal-like relationship like Compassion International, World Vision or Forever Changed International. These organizations allow children to hear and learn from those they sponsor firsthand. As an adult, you can lead by example, and donate to causes that are important to you.
Charitable giving often has benefits beyond helping to improve the lives of others. Despite popular belief, studies have shown that giving money to those in need improves donor happiness more than spending it on themselves. Additionally, it is reported that the improved happiness and health of people who volunteer or make charitable donations is linked to reduced stress and lower blood pressure.
Beyond the psychological and physical benefits, there might also be income tax benefits associated with charitable donations. Donations to 501(c)(3) charities may reduce taxable income as an itemized deduction (charitable tax benefits are not federally available for taxpayers who take the standard deduction). For large charitable gifts, the amount of the deduction is limited to a percentage of your adjusted gross income (AGI) and varies based on the asset donated. Most gifts to these qualified charities, except for the gift of time, qualify for a deduction.
The most common gifts are cash or check, highly appreciated stock, or personal property (including clothes, furniture, books, etc.). Lesser-thought-of property that also makes a great charitable donation is real estate, cars, life insurance policies, and qualified direct distributions to charity from retirement plans.
Even if you don’t have highly appreciated stock or much cash to give, making simple gifts of time, clothes, or small recurring donations to your charities of choice will still go a long way. Utilize this holiday season to incorporate philanthropy into your life and to enjoy the gift of giving