Year end donations and deductions

In 2005, charities received a record $260 billion in donations, with most of that -- 76 cents of every $1 collected -- coming from individuals. Even more noteworthy, it was not the wealthiest among us doing the giving. Rather, the bulk of individual donations came from households with incomes of less than $100,000.

Those numbers come from Giving USA Foundation, which also reports that while disaster relief effort accounted for a portion of the 2005 donations (latest complete data), contributors also supported more than 1.4 million charities that benefited causes near and dear to their hearts.

As the end of the year approaches, charities tend to get another chance for contributions. There's the seasonal gift-giving, with many people spreading the spirit beyond just family and friends. Others also are looking to take advantage of the tax deduction for philanthropic gifts made by Dec. 31.

An increasing number of charitable solicitations are showing up in our snail mail box these days. There are various environmental groups, several cultural organizations, along with the local food bank and a religious group or two.

The hubby suggested a few weeks ago that rather than give once a year, we parcel out our philanthropy on a monthly basis. We've made a couple of such ad hoc gifts here in the last quarter of 2006, but will be a bit more formalized in 2007.

In the next few weeks, we plan to sit down and sort through the stack of charity request letters we've been collecting. We'll pick those we want to support and then set up our giving schedule for the next year.

Of course, just because we'll have a giving grid, that doesn't mean we won't be able to adjust it if things, either with the group or our personal inclinations or finances, change. But we figure that by giving throughout the year, it might help some groups during a time when people aren't thinking about the organization's needs.

And the IRS doesn't care when during the tax year you make your qualified contribution. As long as it's between Jan. 1 and Dec. 31, you can deduct it (if you itemize) on that year's tax return.

For details on deductible donations, check out this story (this link opens to page 2, which is where 2006 relevant info starts) and this previous DMWT posting, which details some charity gift changes, including the property donation rule that took effect in August).

Supporting the arts: Art and cultural groups are favorites of many donors. We did our part to support the Austin area arts scene today by attending the 21st annual holiday art festival that raises money for the Austin Museum of Art education and exhibition programs.

The hubby and I enjoy these outdoor art fests. When we were Marylanders, we attended the annual Waterfowl Festival in Easton on the Eastern Shore. And yes, over the years we bought a couple of pieces, our favorites being a pair of watercolors by Adele Earnshaw.

Then in Palm Beach County, there was the annual ArtiGras festival, where we added to our collection of Sunshine State objets d'art (think hand carved stone manatee; miniature, not life-size).

So we were pleased to find a similar event here in our new home, especially since it was on the grounds of Laguna Gloria, the museum's original home in west Austin.

It's situated on a hill along the Colorado River, offering great views of the water and an adjacent inlet, and the surroundings are gorgeous. After strolling through the exhibit area, the hubby and I detoured along a waterway path, where we were treated to the calls of a wren and kingfisher.

And, of course, we supported not just the museum with our entrance fee, but one of the participating artists. Here's our new fireplace hearth adornment, a piece created by New Braunfels potter (or, per his business card, "Rakooster," since he fires his creations using the raku method) Ron Boling.

The artist was a bit hesitant to part with the pot, telling us that he almost didn't put the piece out for sale since it was the first he ever made using the Japanese firing method. But our cash payment changed his mind, and we're glad that, in this particular instance, commerce won out over sentiment.

Personal tax note: The hubby and I certainly will enjoy our new piece of pottery, but it won't do us any tax good. In fact, we get no tax break for today's artistic outing.

While our nominal entrance fee will support the Austin Museum of Art, we received admission to the event for our money, so we can't deduct it. Plus, I see nothing anywhere on the museum's Web pages or its online annual report indicating that the facility is an IRS-qualified organization, a key deduction requirement.

As for the pottery purchase itself, that cash went to a for-profit artist and did nothing financially for the museum.

But that's all OK. It was a lovely day, we enjoyed seeing Laguna Gloria and we really like our new artwork.

Comments

[Linda Ball]

AMOA is a qualified charity. I paid $5 to get into the grounds just to take pictures for Austin Daily Photo (I'm also a museum member at a minor level). And photographed Ron's booth and was looking for info on him. Remember, too, folks people with higher income lose deductions, too, at least temporarily. This is an interesting spin on blogging, by the way. I'll be back to check it out. Gotta get my property taxes paid meanwhile!

[Dimes]

This woman wishes most earnestly that charitable giving were not limited to the schedule A, as her family does not have enough itemized deductions to matter.
Interestingly though, like you say, the poorer among us (who generally aren't itemizing) are the most charitable. I wonder why that is. My theory is that the poorer of us have been poor before and know what it's like and are willing to share our abundance, and the richer of us are trying hard to keep up with those who are richer and therefore cannot/will not spare extra money to help others in need.

[Gabe Johnson]

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