Wednesday, November 25 2020 9:20

Worth Knowing

Written by Karen A. Simmons, Chester County Community Foundation

This Holiday Season – How Will You Give Back?

“For it is in giving that we receive.” — Francis of Assisi

Americans expect a very different holiday season ahead. While the pandemic took away many traditions—the annual turkey trot, volunteering at the soup kitchen, gathering with extended families and friends, and children sitting on Santa’s lap—the spirit of “giving” this season is more prevalent than ever. And giving wisely is even more gratifying! Our world is full of good.

Every year, generosity to nonprofits peaks during the holiday season. And nonprofits—especially those that provide basic needs such as food, access to healthcare and financial support—have an increased need this year for flexible, unrestricted funding to meet heightened needs and to recover from COVID-19 with innovation and resiliency.

How can you find legitimate charities that do cost-effective, impactful, good work? Here are a few things you should know before you make your giving decisions this year.

Due Diligence

Before you donate to a charity, you want to make sure your gift is going where you intend. For this, you need to do a little research or due diligence.

Due diligence has two levels. The first level is merely compliance: Is the charity registered properly? The second level is performance: Does the charity’s work make a significant positive difference?

Compliance is relatively easy to determine. First and foremost, the grant or gift must be made to an organization that’s identified as a public charity or religious organization as approved by federal standards.

In Pennsylvania, generally, charities that solicit donations must register with the Pennsylvania Department of State. Contact that office to verify that a charity is registered (go online or call 800-732-0999).

You should also ask what portion of the charity’s revenues are spent on programs and services, as compared to fundraising and administration. Look for a minimum of around 75% spent on programs.

But compliance is not enough when it comes to large charitable gifts and estate planning.

To help determine performance, begin with GuideStar by Candid. This free national database works in cooperation with the IRS and the Better Business Bureau Wise Giving Alliance. Go online to find IRS Form 990 tax returns of charities throughout the U.S. along with information on the charity’s programs, financials and operations.

Giving Locally

Many donors want their financial contributions to benefit their neighbors and local communities. And there are many opportunities for local giving. There are 1.5 million registered nonprofit charities in the U.S., 13,000 in Pennsylvania, 8,000 in the Delaware Valley, and 800 in Chester County.

Again, research is key to finding organizations that serve constituents in your town, county, borough and state.

Covid-19 Tax Changes

To stimulate philanthropy, the Coronavirus Aid, Relief, and Economic Security (CARES) Act offers extra tax incentives this year for individuals and corporations. These provisions end on December 31, 2020, so you’ll want to act soon to take advantage of them.

• Taxpayers can deduct up to $300 in charitable giving, even if they don’t itemize.
• Taxpayers can deduct up to 100% of adjusted gross income for charitable cash contributions (normally 60%).
• Corporations can deduct up to 25% of taxable income for charitable contributions (normally 10%).

There are a few tax exceptions to these provisions to consider, including gifts to private foundations and donor advised funds, such as those held at the Chester County Community Foundation. We suggest checking with your tax advisor to see how your charitable giving can be amplified using CARES Act incentives.

Relying on Experts

It’s always good to ask for help when dealing with important financial decisions. When looking to donate, your local community foundation has a wealth of information on community issues, as well as the local, regional and national charities best positioned to meet community needs and aspirations.

The Chester County Community Foundation urges donors to give generously and wisely. We connect people who care with causes that matter, so their legacy makes a difference, now and forever.

Karen Simmons is President & CEO of Chester County Community Foundation, which connects people who care with causes that matter, so their legacy makes a difference. The Community Foundation helps donors discern which charities meet their criteria for giving generously and wisely. 610-696-8211;