Donating to a charity can be as simple as writing out a check or using a credit card. This is the most common form of philanthropy in the world. No matter the size of your donation, you will be contributing valuable support to funding. All donations add up and can provide needed income to fund a charity's programs. You can also give through an online source of crowdfunding such as Gofundme.com. This way funds can also be aggregated. Online is still not the primary way that donors give, but it is the fastest-growing method. Some people find that setting up a private or family foundation is the way to go especially if they are high net-worth donors or families. You may be familiar with some of these such as the Rockefeller Foundation. This is a quite large foundation. However, most of the 80,000 private foundations are unstaffed and have less than $1 million in assets. The IRS has lots of rules for private foundations, including requiring that they give out a certain percentage of their assets each year. Even small charities will need good legal advice and a team to develop the objective, to research charities, and to develop procedures as to how to handle the finances. Another way of giving is through a Donor Advised Fund (DAF) This type of giving has grown exponentially. In 2020, grants from DAFs to qualified charities totaled an estimated $34 billion, up 27 percent from 2019. These charitable giving accounts are offered by a sponsoring organization that is designed to be accessible, simple, and less expensive alternatives to setting up a private foundation. You put your money in, let the sponsoring institution manage it, and then make a donation to the cause of your choice. There are also tax incentives through a DAF. People often overlook a very needed and common area of giving that provides zero out-of-pocket. And that is your time. Much-needed human skills are very valuable to charities. You can tailor your volunteering to your interests, lifestyle, and availability. Consider donating a car, boat, or even art. Charities may be in a position to accept these types of donations, which they will later sell and reinvest the earnings into their annual operations. As with all donations, you may be able to realize a tax benefit. One thing to note is that charities have policies around what type of donations they will accept. There are also procedures in place as to how the donated funds will be used, Some have restrictions on accessibility to funds while others may not. You can ask the charity of your choice about their gifting strategies and determine if they work for you.
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