Tis the Season . . .

December 31, 2013 is fast approaching and the deadline for making charitable gifts and receiving an income tax deduction is fast upon us. I often wonder who is giving and how much is being given. One source for such statistics is the National Philanthropic Trust.

Some of the numbers are encouraging, especially in light of the Recession of 2007 – 2009. The percentage of U.S. households which give to charity is 88%.  Charitable giving is up 3.9% which exceeds the consumer price index. Of total giving, the largest source is from individuals (73%), followed by foundations (14%), bequests (8%), and corporations (5%) [Yes, there are rounding errors—not my issue].There is more encouraging news! According to the Census Bureau in 2012 the   median household income was $51,371; and yes, household income is finally moving up: and those households are making charitable gifts. The average annual household contribution to charity in 2012 was $2,213. So it looks like the average household is giving to charity about 4% of their income.

In my personal financial planning practice, I encourage my clients with three types of charitable giving. The first is universally recognized, the second not quite so and the third you are already doing and just do not realize it.  Have I secured your attention?

First, is the tithe. The concept that 10% of your gross income should be given to charity has been around for millennia. My personal recommendation is that the tithe be given to your church, synagogue, mosque or place of worship.

Next on my list is that amount given to charity which exceeds the tithe. Religious groups typically refer to this gift as an offering. These are dollars given to religious organizations other than your place of worship, and/or community organizations like the United Way, Boy Scouts, Homeless Shelters, Food Banks, Community Foundations, etc.

Finally, there is the alms or almsgiving. Like the tithe, alms giving has been around for a very, very long time and is present in a variety of cultures and religions.  Almsgiving is an act of compassion and is viewed as a virtue. An example of almsgiving would be paying for a meal for someone who is without means. A word to the wise, purchase the meal—do not give cash.

Susan and I encourage readers of our blog to increase their level of giving each year. If you are in the “solid 4%” consider moving up to 5% for 2014. Over time you will be amazed how much you are able to give away. Oh, and yes, there is a tax deduction for charitable giving, but that is not a reason to give, it is just a fringe benefit!

I hope you will join me on this month’s CE/CPE Webcast: Year End Tax Planning on Friday December 20, 2013 at 1:30PM EST. This Webcast will provide an overview of the key changes within the tax laws for 2013. We will cover new tax provisions to watch for as well as how the tax law changes will affect tax planning for our clients. The presentation is web based and virtual seating is limited. The course is approved for one hour of CPE and CE. For more information or to register, please send an email to hello@ttillery.com at ttillery.com

 

Speak Your Mind

*