By Jenna Peters
‘Tis the season to be giving…especially now that it is the end of the year and some of you are wanting to hit that tax quota for giving and donations. Did you know that donating directly to non-profits is super important for more than just the reasons you think?
I’m actually the president of a non profit organization here in our city. It’s called the New Braunfels Community Cat Coalition (NBCCC) where we provide free spay/neuters and vaccinations to local, feral cats. Our non-profit, like many out there, is 80-90% run on money from grants. Grants are a type of financial aid that donors have contributed to, and they don’t have to be paid back. Grants are amazing, and without them, we would cease to function.
However, many grants have stipulations with exactly how they can be used. For example, for NBCCC, many of our grants can only go directly to surgical supplies like gauze, suture material, vaccinations, etc, but we have so many other expenditures outside of that. Granted, surgeries and their accessories are most of our cost, but we also have repairs to the surgical clinic like new flooring. We also have marketing costs, buying t-shirts and gifts for large donors, as well as new machinery like an autoclave (a machine that sterilizes surgical instruments). All of these little things add up!
Without the extra funding that comes directly from donors, we wouldn’t be able to function nearly as well, and this is just with the non profit that I personally work with. I imagine that other non profit organizations have the same conundrum. This is why it is so important to donate to individual organizations directly so that they can use this extra funding in a way that their grants may not support.
Not only is it great for the non profit organizations, but there are also benefits to you! In general, you can deduct up to 60% of your adjusted gross income via charitable donations, but you may be limited to 20%, 30%, or 50% depending on the type of contribution and the organization (contributions to certain private foundations, veterans organizations, fraternal societies, and cemetery organizations come with a lower limit, for instance).
For specific details, just search for IRS Publication 526. Since you’re going to end up with a similar amount either way, why not help your favorite charities instead of giving more to the government? Charities use donated funds MUCH more efficiently than the government ever has and are MUCH more transparent with how the funds are used, so it’s a win-win!