Charitable Contributions for Beginners

Ease your company's tax burden while enhancing its image by making a charitable contribution
By Lea Terry, Freelance Journalist / Copywriter Charitable gifts allow even small businesses to give back to the community that supports them, in addition to enhancing their reputation and creating goodwill by being a good corporate citizen. Tax free charitable contributions can also help your company's bottom line, but you'll need to do a little planning to maximize the benefits for your business and for the charities you donate to. Charitable contributions for beginners isn't too complex, however. If you're new to business charitable contributions, you'll want to research tax laws, evaluate the charities you're considering donating to, and put together a strategic plan that considers your budget, your client base and your personal interests.

If you're new to business charitable contributions, you'll want to research tax laws, evaluate the charities you're considering donating to, and put together a strategic plan that considers your budget, your client base and your personal interests. Before you make a charitable donation:

1. Research a charity before making a business charitable contribution.
2. Understand the tax laws related to charitable gifts.
3. Enlist a consultant to help you make strategic charitable contributions.
   

Research charities before making a business charitable donation

There are hundreds of thousands of charities in the United States, and even if you choose to donate locally, you'll still probably have hundreds of groups to decide between. They may all sound like worthy causes, but without some investigation, you can't be sure of how the organization handles its resources or programs. Many websites offer searchable listings of charitable groups, along with ratings and evaluations.
Try:  Charity Navigator offers detailed evaluations of charities, including lists like "Top 10 Charities Overpaying their For-Profit Fundraisers" and "Top 10 Charities in Deep Financial Trouble." GuideStar is a searchable, online database featuring information on 1.7 million nonprofits. You can register for free, but for access to more information, sign up for GuideStar Select or GuideStar Premium.

Learn the tax laws that govern business charitable donations

Both donors and nonprofits must comply with state and federal tax laws, so you'll need to research these laws before you make any charitable contribution.
Try:  The website for the Internal Revenue Service has a section dedicated to nonprofit organizations; check out the page for contributors. Or, you may want to consult a financial adviser, such as T. Rowe Price, which offers information and advice through the T. Rowe Price Program for Charitable Giving.

Hire a consultant to help you create a charitable contribution strategy

For businesses, it's important to be strategic in the way you make charitable donations. You'll need to consider how much of your budget you can devote to charitable giving, in addition to locating charities that are based in your community, and those that can help raise your profile and boost your reputation. To put all this together, you may want to hire a consultant who specializes in helping small businesses decide how to allot their contributions.
Try:  ASG Advisors can help guide you through the charitable giving process from start to finish. Their services include strategic planning, philanthropic research and gift monitoring, and are designed to companies, executives and even public officials maximize their impact on the community through philanthropy. The Giving Back Fund, a national public charity, specializes in helping individuals in entertainment and sports get started in philanthropy. Through the fund's philanthropic consulting and management services, it hopes to encourages philanthropy among high-profile individuals who can serve as role models to others.