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Giving beyond money: Making noncash charitable contributions

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Donating to charitable organizations can be incredibly rewarding. And that reward isn't reserved for people who have the luxury of making large cash donations. Anyone can discover ways to give their time, talents and treasures. Noncash charitable contributions can convey your generosity and help make it possible for a nonprofit to fulfill its mission. In addition, your donations may qualify for a tax deduction.

Let's explore how to give beyond money and the impact it can have.

Noncash giving options: Donating your time & talent

Giving money to your favorite cause sometimes feels like the easiest option. But donating your time or talents may be just as helpful to an organization and could bring you an even greater sense of satisfaction. Being involved also can create a cascading positive impact—you may inspire other people to jump in and help.

Giving your time individually

Opportunities to volunteer abound: serving meals at a shelter, tutoring students, fostering dogs—the options are almost endless. You also may be able to donate your professional services. For example, lawyers and accountants might provide free advice, graphic designers might create a fundraising event program, or a carpenter might build a little free library or pantry station.

Keep in mind that while you may be able to claim income tax deductions for donated money and goods, the IRS generally doesn't allow deductions for your time or professional services. You may be able to deduct standard mileage rates if you operated your personal vehicle for the services, but it's best to consult with a tax professional to be sure.

Orchestrating group volunteer efforts

Another way to give back is to organize volunteer projects with friends, family and neighbors. Group-based efforts, such as Thrivent Action Teams, can help you and a like-minded crew accomplish something meaningful in your community. It can be as simple as coordinating a rummage sale or trail cleanup or as involved as hosting a soccer camp or golf outing.

Donating goods & resources

Donating goods is another way to aid a charitable organization without donating money. For example, giving gently used clothing, household supplies, nonperishable food and school supplies can benefit individuals in need. Before collecting donations, however, it's a good idea to contact the organization to make sure they're currently accepting items and to learn what types of things they need.

Also, keep tax considerations in mind when you're giving away tangible items. It's important to know the rules for claiming your donation as an income tax deduction and how to properly calculate the value of what you're donating.

Placing a value on your donations for tax purposes

Generally, the IRS allows you to deduct the fair market value of items donated to qualified charities. If you donate gently used clothing or household items, you only can claim a deduction for the amount those items, in their current condition, would bring on the open market.

Another option is to donate appreciable assets like stocks, artwork, antiques or real estate. When giving those kinds of assets, you avoid paying capital gains tax on the sale, and you may be able to deduct the asset's fair market value in the year you make the gift. When donating stocks or other securities, check with your financial advisor on the best way to structure the donation.

Understanding the basic IRS rules for noncash donations

It's important to realize that you generally can't take a tax deduction for noncash donations if you claim the standard deduction on your annual tax return. To take the deduction, you'll have to itemize, which may or may not be advantageous for you. You may wish to consult your accountant or tax professional.

If you plan to deduct your donation, here are some rules to remember:

  • Donate to a qualified organization. The organization must be qualified to receive tax-deductible gifts. Eligible charitable organizations meet the requirements of the IRS tax-exempt status and generally include nonprofit groups that are religious, charitable, educational, scientific or literary in purpose or work to prevent cruelty to children or animals.
  • Keep records of your donation. All of your noncash contributions should have some sort of written record. But for any items worth $250 or more, you must have a receipt or letter from the charity that includes the contribution date and amount. For donations worth more than $500, you must include tax Form 8283 with your income tax return, which requires additional details on the items and how you calculated their value. If the donation is worth more than $5,000, you also must attach a qualified appraisal.
  • Take note of limits on the amount you can deduct. In most cases, your total charitable contribution deduction (cash and noncash) can't be more than 50% of your adjusted gross income. Donations to private organizations, such as veterans groups, fraternal societies and certain private foundations, are capped at 30%.

Explore multiple ways of giving

Noncash charitable contributions offer an excellent way to support causes and charities that are dear to you, even if your financial resources are limited. To talk through all the ways you can make charitable giving a part of your larger financial strategy, contact a Thrivent financial advisor.

Thrivent and its financial advisors and professionals do not provide legal, accounting or tax advice. Consult your attorney or tax professional.