On August 17, 1894, Congress passed the Wilson-Gorman Tariff Act, which established the requirements for the tax-exempt status for charitable organizations. Since then, nonprofits have had an enormous impact on society, advancing social causes and providing valuable services to underserved and marginalized members of the community.
Nonprofits also represent a considerable opportunity for economic growth, with the sector comprising 5 to 10 percent of the US economy and 10 percent of US employment. The nonprofit sector is the third largest employment industry in the country, behind only retail and manufacturing.
Each August 17, we celebrate National Nonprofit Day to honor the collective impact of these institutions. National Nonprofit Day provides us with an opportunity to support these vital organizations as they pursue their mission to further social causes. So let’s talk about how to support them!
1. Plan Your Donations
While over 30 percent of all charitable contributions occur in December, you can make a proactive plan to maximize the value of your donated dollars. Specifically, the Tax Cuts and Jobs Act (TCJA) introduced some new income and tax variables that need to be optimized to get the most bang for your charitable buck.
If you would like to support your favorite charity financially, make sure you review the different strategies available to you. While writing a check or clicking the donate button may seem like the easiest way to contribute to your favorite cause, you may be losing out on additional benefits — for you and your favorite charity — by not planning your contributions.
2. Understand How Your Favorite Charities Operate
What if you want to support a specific cause but are unsure if your donated dollars are having a direct impact? Sixty-seven percent of donors say they are occasionally unsure about a charity’s trustworthiness.
There are a few ways to research how your favorite charity operates. You can ask the charity directly about their funding needs and how they use their donations. There are also charity research tools, like GuideStar and Charity Navigator, that publish reports on the operations of nonprofits.
3. Teach the Whole Family How to Donate
Feeling cooped up with the kids during COVID-19? Get them involved with charities! Including your family with social missions can have a dual benefit — it amplifies the impact on a worthy cause important to your family while also increasing the amount you give.
For instance, you can set up donation jars for you and the kids and ask them to contribute to the jars with their spare change, gift money, or allowance. Ask them what they would like to support and let them know where you plan to donate.
4. Contribute Your Skills
The slower summer months allow you, your family, and your coworkers to contribute time and other resources to your favorite nonprofit. Of course, it’s important to safely interact in a COVID-19 world by socially distancing and wearing a mask.
By including your family or your coworkers, you will also amplify the impact of the donated time and strengthen your relationships. Employees, in particular, enjoy using their skill sets and knowledge to support causes, which can increase visibility for your firm within your community.
5. Support Your Favorite Charity on Social Media
Stay up-to-date with your favorite charities by following them on Facebook, Twitter, Instagram, YouTube, or LinkedIn. To raise awareness, you can like, share, retweet, or comment on their posts. And if you make a donation, you can promote this on your social media pages to further increase awareness of the nonprofit.
Financial Planning with Harbor Crest Wealth Advisors
Nonprofits make an indelible mark on the fabric of our society, uplifting causes that otherwise may fall to the wayside. Let’s honor and celebrate their missions by supporting them on National Nonprofit Day. If you would like additional advice on how to best fit charitable giving into your financial life, sign up for our newsletter.