• Gary Grewal

3 Ways to Effectively Donate to Charity

Updated: Mar 18




With the end of the year and Giving Tuesday approaching, think how noble it is to include charitable giving into your life. If you’re lucky enough to buy a home, go on vacations and enjoy nice dinners or have the latest and greatest gadgets, you’re in a prime position to donate. Think of everything that makes our society wonderful. There is likely a charitable endeavor behind it. Like to hike? There’s probably a local Land Trust behind trail construction and ongoing preservation efforts. Giving also makes us better people, more compassionate, connected, happy and optimistic about all the great people and efforts out there.


1) Verify the Charity:This is probably the most important step. Not only do you want to ensure that your charity is an IRS recognized organization in good standing, but also that it does not have any scandals or transparency issues affecting it. Use sites such as Charity Navigator to analyze how well the charities you are interested in run the business aspects, including accounting and the percent of donations that actually go to the programs. The last thing you want is to muster up the courage to donate, only to realize pennies on the dollar actually went to helping the program recipients. Look at the ratings and read about the experience of others. Research the charity on the news. Make sure you feel confident about to whom you are giving your hard-earned dollars.


2) Consider a Donor Advised Fund (DAF): Now if you’re really altruistic and well-heeled, a DAF (also known as a Giving Fund) can be an excellent tool to maximize your giving and also make it less burdensome on you. It’s an account where you can put cash or securities in it to be invested or granted to charities of your choosing. The funds in a DAF grow tax-free, and they take care of all the paperwork so there’s no need to track checks and receipts. Let’s say you inherited Boeing stock from Great Grandma Phyllis years ago. Instead of using your own after-tax income to make your charitable donations, you can donate the stock and there are no capital gains to you. You can also spread the proceeds of it among different charities and over different years. A DAF also offers continuity. If you get a windfall or sell an investment property and have high income, you can throw a chunk of it into your DAF and give grants over five years instead of a gift all at once.


3) Check into Employer Matching Programs: Many employers offer matching programs to their employees, either year-round or during special giving events such as the holidays. A friend of mine works for a company who allows them to have payroll deductions or a percentage of their bonus taken out and given to their charity of choice. Another company that serves higher education gives a matching donation for any donation given to a K-12 or higher education institution. Keep an eye out for company newsletters or ask an HR colleague about charitable giving benefits. If nothing is available, keep in mind that many charities participate in events such as Giving Tuesday, and whatever donations they receive during that time frame will be matched by their respective benefactors.


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