financialforum
charitable Giving
the holiday season is a time of giving, but before you write that
check, remember these rules so you — and your charity of choice
— can make the most of your donation. by Phil Dyer, cFP
b
ecause of the economy, more or other investments that make ideal
charities are using paid solicitors charitable contributions. When you do-
(who keep between 25 and 95 nate appreciated stock, you receive a tax
cents of every dollar they raise), and the deduction for the full fair market value of
number of misleading fundraising pitches the stock on the date of gift and avoid pay-
and look-alike scam charities is increas- ing capital gains taxes on the apprecia-
ing. Smart givers should follow these tion. the qualified charity also is exempt
rules to ensure their money is going to from paying taxes when it sells the stock,
the right place: resulting in a win-win situation for both
Research the charity: Use a charity re- you and the charity.
make a Difference
search tool, such as
www.charitynavigator Explore donor-advised funds: Giving
for a military child
.org, to find out how efficiently a charity appreciated securities makes sense if
■ One-hundred percent uses donated funds, how much charity you are supporting a small number of
of money donated to the
leaders are paid, and other key facts. Many charities with large donations, but sup-
MOAA Scholarship Fund
people are shocked to learn how little of pose you want to give smaller amounts
helps the children of
military families. To learn
the money they donate actually goes to- to many charities. if this is the case, look
more, visit
www.moaa
ward a charity’s cause. in general, look for at a donor-advised fund, which allows
.org/scholarship. charities where at least 75 cents of every you to make a large donation to a central
dollar supports the actual program. charitable account and then make dona-
Know the IRS rules: the irS has become tions in increments as low as $100 to a
more stringent about enforcing charitable broad range of charities.
contribution rules, setting up potential Don’t miss the direct IRA contribution:
tax traps for unwary donors. Several key although required minimum distributions
requirements include needing a written from iras have been suspended for 2009,
confirmation from charities you give $250 you still can make a direct charitable con-
or more to in a calendar year and an item- tribution from your ira for up to $100,000.
ized list of your deductions to qualify for you don’t get to claim a tax deduction for
taxable deductions and having to file form these contributions, but you can avoid pay-
8283 (Noncash charitable contributions) ing income taxes on the withdrawal. this
if you donate more than $500 total in prop- provision is due to expire Dec. 31. MO
erty to charity in a year. another stumbling
block is claiming the proper charitable de-
— Former Army capt. Phil Dyer, cfP®, is
duction if you receive goods or services in
deputy director, Benefits Information and Finan-
return for the donation.
cial Education. To find a financial planner near
you, contact Garrett Planning Network at
Consider giving appreciated securities:
(866) MOAA-GPN (662-2476) or
www.moaa
even with the stock market down, many
.org/garrett, or visit
www.moaa.org/financial
people still have highly appreciated stock center for other resources.
48 Military officer December 2009 photo: sean shanahan
Dec_forum.indd 48 11/4/09 3:42 PM
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