Around the holidays, for-profit companies see an opportunity to do something charitable, even though they’re not technically registered non-profit organizations. The concept reminds me of college. I was in my university’s marching band, and we frequently traveled as a group to performances. At the end of the trips, someone on the bus collected money from everyone else to give to the drivers to thank them for their time and for getting us to the destinations alive.

PayPal is one of the many companies that makes collecting cash from many people easier.

If I were to decide to collect money from people all around the country to give to a non-profit organization all of us supported in one transaction, I might choose to simplify the collection process by setting up a website where people could transfer money online from their bank accounts or pay with credit cards. PayPal is the most popular tool for these transactions. Unfortunately, PayPal’s policies are confusing, poorly written, and inconsistently enforced.

Regretsy, a website that brings attention to odd items available on the shop Etsy, created a gift exchange program to help 200 kids receive Christmas presents this year. Families applied to be recipients, and Regretsy verified that those who made the list of gift recipients were truly needy. After publicizing the plan, Regretsy raised enough money not only for toys for the kids, but for cash gifts for the families. This was made possible by PayPal, and the company collected its usual fees on every transaction.

Regretsy used the PayPal account to buy some of the gifts, transactions on which PayPal collected its usual fees. The PayPal account also contained money for other purposes, but PayPal froze every cent in Regretsy’s account a few days ago. Hellen Killer, the operator of Regretsy wasn’t able to get anywhere with a customer service representative. You can read her side of story here. The representative claimed only non-profit organization can use the “Donate” button, but that is incorrect, and it is one of the few clear items in PayPal’s terms. PayPal insisted that Regretsy return the gifts it bought for the 200 families (while keeping at least a portion of the transaction fees) and return the contributions it received (while keeping at least a portion of the transaction fees). Apparently this became a charitable endeavor for PayPal rather than for the 200 families.

After outcry from the internet and significant proof that PayPal did not follow their own policies, Anuj Nayar, PayPal’s Director of Communications, announced that they were following federal regulations that govern all payment processors, released the funds, and is making its own contribution to the cause. This was done without an apology for PayPal’s misapplication of policy, stubbornness of the customer service representative who refused to allow Hellen to speak with anyone with better knowledge of the situation, or the inconvenience it caused.

Operating a payment processing business like PayPal is a risky endeavor, but this is not the only story about the company freezing an account without good reason. The website SomethingAwful raised money following hurricane Katrina and faced similar issues dealing with PayPal, documented here.

Here is how these issues could be avoided, other than simply choosing a payment processor other than PayPal.

In a perfect world, anyone who wanted to create a charitable project of any scale could create a registered non-profit entity and legitimize the endeavors. Unfortunately — or perhaps fortunately, to prevent fraud — creating and registering up a non-profit organization is not that easy. It’s a long process, and if your initiative is in response to an event like hurricane Katrina, getting the proper paperwork together, consulting with lawyers, assembling a board of directors, and raising the significant financial requirements would take away from resources you need to just collect money from others and give it to deserving recipients.

The next best option for an outfit like Regretsy or an individual with a big idea is to partner with an existing non-profit whose mission statement matches the mission of the project. A partnership would be much more practical for short-term projects like Regretsy’s initiative. All money could flow directly from the donor to a non-profit organization, through the group’s own collection methods, to the recipients. This way, the paper trail uses an already-established process, and the contributions are tax-deductible for the donors.

The original version of this article, PayPal Makes Accepting Charity Difficult, is copyrighted by Consumerism Commentary.

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The year is quickly coming to a close, and the first priority for many people right now is getting through the holidays with as little stress as possible. Focusing solely on the holidays at the expense of your household’s financial needs can only add to stress later, so it might help to get a few items in order now rather than attempting to manage your year-end tasks in the one week between Christmas and the new year. A few days ago, I suggested changing your 401(k) contribution level now because of the time it takes for changes to take effect, and today, I’m looking at charity.

A tax benefit shouldn’t be the sole reason you contribute to charitable organizations, but there is a federal tax deduction for charitable contributions, and it’s better for a family’s own financial situation to take advantage of this benefit if plans call for charity regardless. Unlike other benefits that allow qualification extensions into the new year, to receive a deduction on this year’s tax return, the organization to which you donate must receive the contribution this calendar year.

Unfortunately, the time you spend volunteering for a non-profit organization is not tax-deductible. While volunteering could benefit an organization more than a moderate financial contribution, the tax code favors gifts of value, not time.

Choose your recipient

Charity isn’t an end-of-year activity. If you value a certain cause, doing what you can throughout the year can be a more effective way of maximizing the benefit you can provide to a non-profit or religious organization. Nevertheless, in busy lives, people often don’t think about finalizing their charitable gifts until the spirit of the holiday giving season is in full-force. If you think about giving throughout the year, you may already have one or more intended benefactors.

If you have a charity in mind or if you need to find one, take the time to ensure the organization is not only legitimate but each dollar you provide will do the most good.

Charity Navigator is an indispensable tool. Using Charity Navigator, you can research any non-profit organization. You can see an evaluation of how efficiently the organization uses donors’ contributions and read the latest financial reports to determine how highly the executives are compensated. Charity Navigator will also help you ensure the organization you choose is a qualified 401(c)3, a non-profit organization recognized by the government.

I like to evaluate what percentage of contributed money is used for marketing, particularly. Marketing is of course very important to an organization, and effective marketing can pay for itself in increased donations, but if too much money is spent on marketing and not projects that directly apply to the organization’s mission, you have to consider that your donation may be more effective elsewhere.

In choosing an organization, consider your own values. You may be aware of an organization whose goals you admire and respect, and can start there. But if not, consider what issues are central to your core beliefs. Would you like to see poverty eradicated around the world? Do you believe people can improve their lives by living in a new home? Are you concerned that budget cuts in education are affecting children’s ability to receive a well-rounded education? Should more resources be committed to helping military veterans? You should be able to find an organization catering to the same issue that you consider most important.

When you complete the donation, be sure to keep a copy of the receipt for tax purposes. The receipt should show how much of your contribution is tax-deductible. If you receive a thank-you gift in return for your contribution, the amount you provide will most likely not be 100% deductible.

Open a donor-advised charitable fund

If you can’t or won’t decide which organization is most relevant to your values and charitable desires, open a donor-advised charitable gift fund. I opened this type of account a few years ago at Fidelity. The charitable gift fund allows an individual to contribute today and receive the tax benefit, while granting donations from the fund to worthy organizations over time. By using the gift fund, I could contribute funds throughout the year, invest in index funds, and assuming the funds appreciate in value, donate even more to the non-profit organization.

Even if the value goes down, most organizations can receive gifts in stocks or funds, so they can choose to sell and use the cash when it’s best for the organization.

You cannot withdraw the money you’ve contributed to your charitable gift fund, however. You can’t use a charitable gift fund as a saving or investment vehicle for yourself. Once you transfer money to your charitable gift fund, it becomes the property of the fund itself or its parent company. That’s the reason you can take the tax deduction immediately rather than waiting until you grant your donation to a non-profit organization.

Each year, I donate to DonorsChoose, an organization that helps teachers receive the resources they need for effective classroom instruction, an organization within my undergraduate university, and a few other organizations that match my values or are in response to important issues.

If you donate to charity, do you do so during the year or only at the end of the year? How important is the tax deduction?

The original version of this article, Year End Reminder: Donate to Charity, is copyrighted by Consumerism Commentary.

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I recently received reader feedback from a conscious saver who is planning to move his money from Wells Fargo to a credit union. She won’t make the Bank Transfer Day November 5 goal, because the credit union’s branch is planned to open November 7. This reader plans to be one of the new branch’s first customers.

This reader wrote into Consumerism Commentary not to write about the effort to move away from big banks. She volunteers for charitable organizations and is wondering why there is no tax benefit available for volunteer time. Charitable financial contributions, such as cash, stocks, or property, are often tax-deductible if the organization receiving the donation is a registered non-profit. I’ve taken advantage of these tax deductions for several years, but for me, the purpose of contributing to non-profit organizations is not the tax deduction. The purpose is to legitimately help an organization whose mission is meaningful to me and my worldview.

I’ve been lucky to be in a financial situation where contributing to organizations would not endanger my own bank account. Another method of donation that can have a great effect on an organization is spending time as a volunteer. In my experience, most non-profit organizations do not generate enough revenue from operations or fundraising to maintain a healthy payroll. They often rely on passionate volunteers to handle a large amount of work. If you don’t have a large amount of money to provide an organization, you could be more beneficial to the group by offering your services as an unpaid volunteer.

If the more financially-comfortable money donors receive a benefit from the government for their assistance in the form of a tax deduction, shouldn’t volunteers receive a benefit related to the financial value of their time and work? Furthermore, the requirement that taxpayers need to itemize deductions in order to receive the charitable contribution deduction results in lower-income taxpayers, who are less likely to itemize, don’t take a deduction they might deserve. This tax deduction favors upper middle class and above because they are more likely to have money to share and are more likely to itemize deductions.

The Congressional Budget Office agrees with me: “Such tax incentives are limited, however, to the subset of taxpayers who itemize, and they favor high-income people, who face relatively higher marginal tax rates.”

While the feeling of being a positive force in the world should be a good enough motivator for working with organizations whose missions you’re passionate about, why should one form of contribution be encouraged through tax policy while another is not?

The War Revenue Act of 1917 established the charitable contributions deduction, only four years after the federal income tax as we know it was established. It’s long been a part of the U.S. tax code and isn’t likely to go away, particularly because it’s not only individuals who take advantage of the benefit. Some corporations can deduct up to 10% of their taxable income, and you can be sure that regardless of corporate goals, shareholders want their companies to reduce expenses for taxes as much as possible. Major contributions also constitute great public relations, helping prospective customers associate good deeds with the company.

Understanding that the tax deduction for charitable contributions would never go away without a major overhaul of the U.S. tax code, is there a place for additional deductions for time and effort spent volunteering?

There would be a few challenges.

• Fraud. With a financial transaction, the bank has a record that can be submitted to the IRS for proof if called upon to do so. Without an independent verification of the time spent volunteering, it would be too easy to submit false documentation and take advantage of the system.
• Valuation. How do you put a value on one hour spent as a volunteer? The value of time has always generated good discussion. Is an hour from a CEO who sacrifices the time he could be spending building a company, creating jobs, to be a volunteer more valuable than an hour from a high school student who is looking for opportunities to enhance his college applications? If the CEO spends his time stuffing envelopes with fundraising postcards and the student takes an hour to organize an event having a direct impact on an elderly community, is each hour rated the same?

These issues are not insurmountable, but it would take some planning to develop a method of making the tax deduction verifiable and fair. With tax policy set by lobbyists, we may never see an arrangement like this within the tax code. Unless corporations were to find value in spending time rather than money for charitable causes, there would not be enough pressure on politicians to change the rule.

The reader who brought this idea to my attention also asked the following: “How do we make suggestions to the tax laws? Is there a process for raising such an issue?”

The first stop is your local Representative and Senators. Send letters, call their offices, and get more people to do the same. Laws can be changed by citizens, but it would take a significant effort. If you feel strongly about the issue, convince others to take up the cause with you.

It’s almost Thanksgiving, so take a page from Arlo Guthrie’s Alice’s Restaurant. For people to change even a small aspect of the tax code, it’s going to take a movement. If you’re passionate about this idea, start websites, inspire people to follow, and change the world.

Photo: Fort Meade
Congressional Budget Office

The original version of this article, Tax Deduction for Time Spent Volunteering, is copyrighted by Consumerism Commentary.

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Updated March 16, 2011. If you have been paying attention to the media, you most likely saw terrifying footage of tsunami waves destroying much of the eastern coastal areas of Japan, particularly Miyagi prefecture. Friday’s earthquake measuring 9.0 magnitude on the Richter scale triggered massive waves that leveled homes and farms, left thousands missing, forced an evacuation of the area surrounding a nuclear power plant, and triggered estimates of ten thousand killed. The natural effects extended to the west coast of the United States, where strong currents affected some ports and waves forced evacuations of some areas.

In addition, the Fukushima Dai-ichi nuclear power plant was affected by the disaster, with some injuries to employees after an explosion and a call for surrounding residents to evacuate.

When devastation hit Haiti in 2009, Americans wanted to help those affected by devastation. Unfortunately, unscrupulous individuals worked hard to take advantage of the good will. Soon after the disaster, there were many websites collecting funds purportedly for assistance. Unfortunately, many were simply scams, designed to take people’s money. There will surely be similar websites designed to trick well-meaning individuals into parting with their money.

If you plan to support the relief efforts in Japan, consider sending money to legitimate, international organizations that focus on humanitarian aid during crises. Don’t give food or supplies; it’s best to let the aid organizations decide what materials they need and when they need it. As with any charity, though, the exact dollar you send today may not go directly to Japan. Many organizations already have funds committed to relief. Your dollar will go to replenishing the money that is currently being spent.

The American Red Cross is already on the scene in Hawaii and the U.S. west coast, and has pledged financial support to the Japanese Red Cross. You can donate $10 to the Red Cross by texting “redcross” to number 90999. If you prefer to make a larger contribution, visit the American Red Cross donation center. “Your gift to the American Red Cross will support our disaster relief efforts to help those affected by the earthquake in Japan and tsunami throughout the Pacific. On those rare occasions when donations exceed American Red Cross expenses for a specific disaster, contributions are used to prepare for and serve victims of other disasters.”

Japan sits on the intersection of three tectonic plates and is thus no stranger to earthquakes. In fact, Japan’s infrastructure, at least in the cities, is particularly suited to withstand most major earthquakes, more so than the rest of the world, including California. The death toll could have been much higher with less sophisticated engineering, but this is no comfort to those displaced, hurt, or killed by the tsunami. As Japan is well-prepared, the need for international assistance is not as great as it would be for a developing nation.

UPDATED. Doctors Without Borders (Médecins Sans Frontières) has been assessing the situation, and is now providing mobile clinics on the ground in Japan. “Although injured people had been evacuated by helicopter from these areas, many elderly people were still there, some of whom were dehydrated, the coordinator said… MSF is now identifying specific needs — including oxygen, non-food items, medical items and water — and will work with Japanese authorities to assist these populations.” The organization is currently not soliciting donations for this effort, they are drawing upon previous donations that have not been earmarked for a specific cause. If you’d still like to donate to MSF, in the United States, visit the organization’s website.

Oxfam has yet to determine whether Japan has a need for this international organization’s assistance. Usually, Oxfam reserves its support for areas of the world that would not be able to support recovery on their own. Japan is a wealthy notation, and has been charitable when other nations needed assistance. Many governments, including that of the United States, have pledged support, but unlike recent disasters, Japan has the ability to handle much of the recovery.

UPDATED. The International Medical Corps is actively working in Japan right now to support the government’s response efforts. To provide $10 in support, text MED to number 80888 or donate online.

Keep the above in mind when considering your donations. Give only to organizations that have 501(c)3 status — not because of the tax deduction, but because of the requirement of public accountability.

The original version of this article, Safe Donations to Victims of the Tsunami in Japan, is copyrighted by Consumerism Commentary.

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For the second year in a row, I offered to match Consumerism Commentary readers’ charitable contributions donated during the two weeks following Thanksgiving, up to $5,000.

After extending the matching period a third week, and with MoneyCrush‘s offer to match the contributions made between $5,000 and $6,000, we surpassed all goals. After falling slightly short of the goal of $4,000 last year, and ambitiously setting a higher goal this year, readers stepped up this year and donated $8,033!

Readers donated to worthy charities such as Heifer International, charity: water, DonorsChoose, Habitat for Humanity, and many others. I promised to match the first $5,000 with a donation to Médecins Sans Frontières (MSF), also known as Doctors Without Borders in the United States. See the image attached, a receipt for my matching contribution of $5,000.

Jackie from MoenyCrush will be donating $1,000 to Nothing But Nets to match even more of readers’ contributions.

Thank you, readers, for your amazing generosity this year! I consider myself particularly lucky that I can share some of my success with others, but even luckier that I’m among an amazing community of people who are willing to share their good fortunes with others.

The original version of this article, Readers Gave $8,000 to Charity Since Thanksgiving, is copyrighted by Consumerism Commentary.

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On Thanksgiving, I announced that Consumerism Commentary would match charitable donations through December 11, 2010 with a donation to Médecins Sans Frontières up to $5,000. Word is spreading, and other bloggers are interested in participating as well.

Jackie from MoneyCrush has announced that she will match donations reported above the $5,000, raising the bar to $6,000. Consumerism Commentary will match every dollar donated up to $5,000, and MoneyCrush will match the next $1,000.

If you’re planning to give to a charitable organization at some point during the remainder of the year, consider doing it during this matching period. Again, donate to your favorite charity by December 11 and forward a copy of the receipt to the email address charity at this domain name (consumerismcommentary.com) by December 14.

Throughout the matching period, I’ll update the original article with our progress.

The original version of this article, MoneyCrush Adding Support to the Charity Match, is copyrighted by Consumerism Commentary.

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Last year, Consumerism Commentary matched $3,584 in readers’ charitable contributions. For every dollar that readers donated and informed us, we made a matching donation to the World Food Programme (through the American arm of the organization, the Friends of the World Food Program). I felt this was a great way to give thanks to our readers as well as to be thankful that we, as a community, are in a position to help others.

On behalf of Tom, myself, and everyone else who contributes to Consumerism Commentary behind the scenes, have a happy Thanksgiving. I’ve been spending the week with my family in California. I hope that everyone who celebrates this holiday has a chance to spend time with loved ones.

Between now and December 11 17, Consumerism Commentary will match any charitable donations you make, up to $5,000 in total. Feel free to give to a charity of your choice (non-profit, 501(c)3 only), and forward us the receipt through email. Full instructions are at the end of this article. After December 11 17, we will match the total amount donated by readers with a donation to Médecins Sans Frontières (MSF), also known as Doctors Without Borders in the United States.

MSF recently commented that the response to the cholera outbreak in Haiti has been inadequate. The organization, existing to deliver emergency aid to people affected by epidemics or natural or man-made disasters, has already treated 16,500 individuals affected by the disease, and is currently in the best position to treat more. Doctors Without Borders USA is rated highly by Charity Navigator. The best way to help is to donate with labor or materials, but financial donations have a significant effect, as well.

Here is the organization’s mission statement:

Doctors Without Borders/Medecins Sans Frontieres (MSF) is an independent international medical humanitarian organization that delivers emergency aid to people affected by armed conflict, epidemics, natural or man-made disasters, or exclusion from health care in more than 70 countries.

MSF’s decision to intervene in any country or crisis is based solely on an independent assessment of people’s needs — not on political, economic, or religious interests. MSF does not take sides or intervene according to the demands of governments or warring parties.

In recognition of its work, MSF was awarded the 1999 Nobel Peace Prize.

For Consumerism Commentary to match your donation, follow these two simple steps:

• Give to a charity of your choice between Thursday, November 25 and Friday, December 17, 2010.
• Email your receipt to charity at this domain (consumerismcommentary.com) by Monday, December 20, 2010.

I will not use your personal information contained on the receipt for any purpose, and you’re free to remove your personal information if you like. Please note that if we reach the maximum of $5,000 before the deadline, we won’t be able to match any subsequent donations.

Have a safe and happy Thanksgiving!

Also, Jackie from MoneyCrush has agreed to match donations between $5,000 and $6,000 to the Nothing But Nets campaign of the UN Foundation, whose mission is to save lives by preventing malaria in children.

December 16 update: As of today, readers have confirmed donations totaling $8,033 which, including Consumerism Commentary’s and MoneyCrush’s matching contributions, adds up to $14,033 designated for charity! Thank you to everyone who has participated thus far.

Photo: Slideshow Bruce

The original version of this article, Consumerism Commentary Matching Charitable Donations for Thanksgiving, is copyrighted by Consumerism Commentary.

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Earlier this year, the State of New Jersey missed out in $400 million in federal aid for public schools due to an administrative error and the political inability to take the educational needs of the state’s students seriously. This money would have been part of the federal Race to the Top program, a set of competitive grants awarded to states that show they could, theoretically, spend the money effectively.

While this fair state missed out on Race to the Top funds, New Jersey qualified to receive $268 million from the federal jobs program. This money is being distributed to districts, with some receiving a few hundred thousand dollars and some receiving over a million, though the share calculation has been kept private. The federal government is not the only entity interested in putting money into public schools to aid the neediest programs.

The public schools in the city of Newark will win the funding race thanks to the young founder of Facebook, Mark Zuckerberg. Newark mayor Cory Booker met Zuckerberg only in July, but the two have been communicating since then. This fast friendship has resulted in the wunderkind donating $100 million in the form of Facebook stock to Newark’s schools. Unfortunately, the value of this stock is based on a Facebook total valuation of $33 billion which may be a bit optimistic.

Why Newark? Why not. Zuckerberg has no direct connection with the city, but the district is surely needier than the his hometown’s public schools in White Plains, New York.

With a movie coming out in October that is sure to paint the Facebook founder perhaps unfairly in a negative light, a generous philanthropic gesture could do wonders for his image. Money is money, though, and to the students in Newark who will be the beneficiaries of this generosity, the donor’s motivation shouldn’t be too important. I would like to believe that the money will be managed properly and find its way to the direct benefit of students in the city.

The original version of this article, Newark Public Schools to Receive $100 Million, is copyrighted by Consumerism Commentary.

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In May 2009, a group of the most powerful individuals in the world held a secret meeting to discuss the plans for their significant wealth. Bill Gates and Warren Buffett convinced David Rockefeller to to preside over the first of several billionaire meet-ups. Their idea was first to discuss philanthropy with like-minded individuals and determine how they could go about promoting the idea of giving wealth away to worthy charities and organizations.

Through several follow-up meetings, all closed to media, the billionaire cabal agreed in principle to encourage themselves and other super-rich individuals in the country to pledge to contribute 50% of their wealth throughout their lifetime or in legacy to charity. Fortune Magazine broke the story yesterday.

If you want to keep current with who is pledging what, monitor givingpledge.org, which will be updated some time in the future with those who pledge to participate in this charitable challenge.

Let’s not forget that billionaires who give away 50% of their wealth will still be left with more money than they know what to do with. If they wish to leave a portion of their estate to children and grandchildren, there could be more than enough left over. Fortune estimates that 50% of the wealth of the top 400 wealthiest individuals in the United States could amount to $600 billion.

It’s easy to be jaded when hearing these large dollar amounts. The government recently invested over a trillion dollars in economic stimulus, and numbers like these have been in the news recently. $600 billion would have an amazing impact for philanthropic beneficiaries. There is a chance here to shape society in ways that a government could never do.

What about those of us who aren’t billionaires? Is giving away 50% of your net worth during your life time or at the time of your passing realistic? Well, giving away charity at that level during while you are living and accruing life-related expenses, like food and shelter, could be a challenge.

Will you join the pledge and donate half of your net worth to charity? Is philanthropy at these levels a luxury only the super rich can enjoy?

Photo: jurvetson

The original version of this article, Secret Billionaire Meeting Revealed, is copyrighted by Consumerism Commentary.

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Earlier today the House of Representatives passed a bill to encourage more charitable contributions for recovery in Haiti. Once this bill passes the Senate and is signed into law by the President, and I expect it won’t be long until this law is official, those of us who have donated or will donate cash before the end of February will be able to count those donations as 2009 expenses. If you itemize when you file your taxes, you can include these donations.

January 22 update: It’s official: The Senate passed the bill yesterday and the President signed it into law today.

You will also have the option of claiming the deduction with your 2010 taxes if you’d like to wait a year.

Although the bill indicates “cash” donations are the only type that are eligible, checks and credit cards, and even donations sent via text message, are considered cash. If you sent care packages through the mail addressed only to Port-au-Prince, not only is the value of your donation not tax-deductible, it most likely didn’t reach anyone. Here are my choices for tax-deductible contributions to relief efforts in Haiti including Médecins Sans Frontières, The World Food Programme, and due to its massive popularity, the American Red Cross.

If you want to deduct donations given via text message, send an itemized copy of your phone bill to the IRS when you file. Only donations to domestic non-profit organizations are deductible, but many foreign international organizations have qualifying domestic subsidiaries.

The original version of this article, Donations For Haiti Relief Will Be Deductible For 2009 Taxes, is copyrighted by Consumerism Commentary.

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Yesterday, a magnitude 7.0 earthquake struck Haiti, with the center only less than ten miles from Port-au-Prince, the capital of the country. Of course, the news of the devastation has been everywhere in the media. Major landmarks have been destroyed by the disaster, including the Presidential Palace and the Port-au-Prince Cathedral. Haiti is a poor country and their own emergency services will not be able to handle the estimated deaths of over 100,000 persons.

Beware of unscrupulous scammers using this disaster as an opportunity to take advantage of well-meaning would-be humanitarians. Don’t respond to emails asking for donations — go directly to the organizations you trust. Donate only to well-established charities working directly in Haiti. Right now, unless you’re on a medical team planning to visit Haiti yourself, the best way to support immediate relief efforts is to donate to organizations focusing on water, food, and medical supplies.

Here are my suggestions.

On Twitter and Facebook, I have seen a number of messages suggesting people who wish to help relief efforts send a text message stating just “HAITI” to number 90999. A $10 charge will appear on your phone bill. This will function as a donation to the American Red Cross. I’m waiting for a response from the ARC to let us know how quickly they will receive donations via text message. I have confirmed the full $10 will be transferred to the organization without mobile phone companies taking a fee per message out of the donation. It’s important to know where your money is going and how fast it’s getting there. The ARC has also dedicated $1,000,000 from its International Response Fund to relief in Haiti. Donate to the American Red Cross International Response Fund here.

Update: According to National Public Radio, it could take an average of 90 days for the American Red Cross to receive funds donated via text message. If you want your donation to have an immediate effect, I suggest giving with your credit or debit card through the organization’s web site or phone service.

Update #2: Here is the official response from the American Red Cross:

100% of your text donation will support the American Red Cross relief efforts in Haiti. The carriers and Mobile Accord will work to get the Red Cross these donations as quickly as possible. It can take anywhere from 60-90 days for the Red Cross to get these funds. Despite this delay in receiving funds, the American Red Cross will continue to provide relief in Haiti and these donations will cover expenses incurred after the fact.

Also, Sprint is charging normal text messaging fees for your donation while Verizon, T-Mobile and now AT&T are allowing these text messages for free.

Doctors Without Borders (Médecins Sans Frontières) is responding to the destruction of hospitals and other medical facilities by setting up clinics. The city’s own resources are unequipped to deal with injuries and casualties. In the United States, first responders like firefighters, police offers, and emergency medical technicians show up almost immediately, but Haiti has no such structure. More MSF staff will be arriving in Port-au-Prince in the next few days. Donate to Doctors Without Borders here.

The World Food Programme is bringing food assistance to victims of the earthquake in Haiti. In addition to the WFP’s food stores already in Haiti, more food is arriving from El Salvador, enough to feed 30,000 people for up to seven days. Donate to the Friends of the World Food Program here.

• Comments from Haiti President René Préval
• Remarks from U.S. President Barack Obama
• Remarks from U.S. Secretary of State Hillary Rodham Clinton

Also, to locate American family members suspected to be missing in Haiti, call the United States Department of State at 1-888-407-4747.

The original version of this article, Safe Donations to Victims of the Earthquake in Haiti, is copyrighted by Consumerism Commentary.

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On behalf of myself, Smithee, and Tom Dziubek, to all those who celebrate today, have a happy Thanksgiving. I will be spending the day with my girlfriend’s family in New York. Although there’s nothing that makes one day of the calendar inherently more special than any other day, Thanksgiving is a good opportunity to think about all the good things in our lives.

One thing that often comes to my mind is the fact that I am only one person among almost 7 billion on Earth and 337 million in the United States. Somehow, I beat the odds and was born in this country and have had countless opportunities generally unavailable to most people in the world.

Between now and the end of the month (now extended to December 4), Consumerism Commentary will be matching any charitable donations you make up to $4,000 total. Feel free to give to a charity of your choice, let us know, and Consumerism Commentary will make a matching contribution to the World Food Programme through its American branch, the Friends of the World Food Program. The objectives of the World Food Programme are to save lives and protect livelihoods in emergencies, prepare for emergencies, restore and rebuild lives after emergencies, reduce chronic hunger and undernutrition everywhere, and strengthen the capacity of countries to reduce hunger. The Friends of the World Food Program is rated highly by Charity Navigator.

Here is an excerpt from the organization’s Mission Statement:

WFP is the food aid arm of the United Nations system. Food aid is one of the many instruments that can help to promote food security, which is defined as access of all people at all times to the food needed for an active and healthy life. The policies governing the use of World Food Programme food aid must be oriented towards the objective of eradicating hunger and poverty. The ultimate objective of food aid should be the elimination of the need for food aid.

Targeted interventions are needed to help to improve the lives of the poorest people – people who, either permanently or during crisis periods, are unable to produce enough food or do not have the resources to otherwise obtain the food that they and their households require for active and healthy lives.

For Consumerism Commentary to match your donation, give to a charity of your choice between Thursday, November 26 and Friday, December 4, 2009, and email your receipt to charity at this domain (consumerismcommentary.com) by Monday, December 7, 2009. I will not use your personal information contained on the receipt for any purpose, and you’re free to remove your personal information if you like. Please note that if we reach the maximum of $4,000 before December 4, I won’t be able to match any subsequent donations.

Donation update: As of December 5 we have received confirmations of contributions totaling $3,584 which, when combined with Consumerism Commentary’s matching donation to the World Food Programme, add up to a total donation of $7,168.

Photo credit: ♥ellie♥

The original version of this article, Consumerism Commentary Matching Charitable Donations for Thanksgiving, is copyrighted by Consumerism Commentary.

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A few years ago, the personal finance blogging community came together to create the pfblogs.org Financial Literacy Challenge through DonorsChoose.org, a charity that facilitates funding for classroom projects needing money. The challenge was designed for bloggers to encourage their readers to provide tax-deductible donations through DonorsChoose.org to fund classroom projects focusing on increasing financial knowledge.

The Bill & Melinda Gates Foundation is issuing a similar challenge. The foundation with fund 50% of any classroom project that prepares students in rural and high-poverty communities for college if the remainder is funded by individual donors.

You can browse the classroom projects eligible for the matching contributions from the foundation. There are hundreds of projects available so it is very likely that at least one will focus on aspects of education you find important.

The classroom projects are not expensive and DonorsChoose.org monitors every step of the process to ensure the teachers requesting the funds use the money properly, effectively, and efficiently. For just a few hundred dollars, you can fund a project. And with the guarantee offered by the Bill & Melinda Gates Foundation, your money will go much further.

Working with DonorsChoose.org was a great experience. The organization kept me informed and I received a package from the teachers and students I helped with photographs and personal notes thanking me for helping their projects become a reality. I strongly encourage anyone who believes the education of children is an important piece of a modern society to take any opportunity to help school programs that are grossly underfunded and in need of assistance.

The original version of this article, Donations to Rural Classrooms Worth Twice as Much, is copyrighted by Consumerism Commentary.

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As I’ve mentioned before, one of my long-term goals is to run a foundation to support arts education, specifically music education. To do this effectively, I would require a significant amount of start-up capital, and I’m not quite there yet. I’m not quite sure that I will ever have the opportunity to succeed, but if I do, it’s likely to take decades to approach that point.

In the mean time, I’m doing what I can to have a smaller effect on some organizations whose missions are important to me. While I didn’t reach my admittedly aggressive goal for charitable giving this year — the lagging economy has convinced me to hold onto more than I would have otherwise — I increased my charity this year over last year. I have given over 10% of my salary this year, some of which was eligible for matching contributions from my employer.

For privacy reasons, I won’t release all of the names of the organizations that I contributed to this year, but they include a health-related organization, a collegiate music program, a performing arts organization, and a public radio station. The performing arts organization is the same group with which I previously severed ties, but I’ve gotten over those issues to concentrate on the people who will benefit from the contribution.

I also added funds to my charitable gift fund, a “donor-advised fund.” The fund allows me to provide money to be held in an account and invested while I recommend grants to be distributed from the fund as I see fit. The main benefit is the donor receives a tax deduction up front while the money theoretically grows. In the best case scenario, the money in the account earns returns from interest or appreciation and the grants can come from this income. Unfortunately, contributions to a donor-advised fund are not eligible for matching contributions from my employer.

Last year, I made the mistake of choosing to invest the entire amount in a total stock market index fund. The quick downturn of the market after the investment convinced me not to touch the money in this account. Rather than assign grants this year, I donated from my own cash. This month, when funding the charitable gift fund, I chose to invest half in a money market fund and the other half in the total stock market index. This way, I can tap the money in the money market fund without concern about the stock market while allowing the rest of the investment to grow for long-term charitable giving.

When the economy is ailing, charitable organizations struggle as people like me are more protective of their earnings, at least in the short-term. As I usually do, I also donated my time by volunteering with organizations this year. I’ve worked for a non-profit, and I know first-hand that the time contributed by those who believe in the mission is often appreciated beyond financial contributions. Did you contribute less money to charitable causes than you planned this year? It’s okay if you did.

The original version of this article, 2008 Charitable Giving: Did You Contribute Less?, is copyrighted by Consumerism Commentary.

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I made a mistake, and I should have known better.

Last year, I struggled with coming up with a needy non-profit organization that I felt I should support through charitable giving. The indecision stems from the desire to contribute to an organization with a mission that reflected one of my passions and the lack of quality non-profits that fill that niche. By the end of the year, I decided to provide money to the Fidelity Charitable Gift Fund, which would allow me to distribute or grant my funds to the recipients I choose at a later date.

I invested these funds like I normally do. With the $5,000 I provided to fund my “mini-foundation” in December 2007, I invested in a broad market index fund. Considering I intended to use these funds, or at least a portion of these funds, throughout 2008, I shouldn’t have chosen to invest in the stock market. I should have left the money in a money market account within the Charitable Gift Fund. The account would have grown to about $5,200 by the end of December 2008 if left alone.

At this time, the account’s value is a little over $4,000, having lost about 20% so far this year. That’s $1,000 less that I have to donate to a worthy organization because I couldn’t find the right match — possibly a procrastination — and because I invested without considering my time horizon for these particular funds.

Now I feel as if I need to leave the money in there until the market recovers its losses from the last year, but it could be a long time before the index fund increases 25% from today. My goal before the end of the year is to finally select an organization worthy of my continued support and pay them directly from my available cash rather than from the Charitable Gift Fund. I’ll also continue to contribute to the Fund but I’ll set some funds aside for short-term charitable giving in addition to continuing to invest in the stock market index fund for longer-term growth.

The original version of this article, Charitable Giving: A Case of Bad Market Timing, is copyrighted by Consumerism Commentary.

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It’s been a long time since I’ve gone through my clothing and eliminated items which are no longer appropriate for wear. For most of my life so far, my habit of keeping clothes for a long time — until recently, I still had a few items left from high school (1994) — was out of necessity. I just didn’t have the money to replace clothing often. I decided, thanks to some encouraging from my girlfriend, that it was time to get rid of clothing I no longer wear either because I just don’t like them or because they no longer fit. Fortunately, my income supports the decision.

I was able to fill five bags full of clothing with mostly shirts that are now too tight or hopelessly out of style.

Rather than throw my unwanted garbs in the garbage, although lexically logical, I’d rather pass them along to someone or some organization that can make use of them or of the income that could be gained in exchange. I’ve seen bins by gas stations and malls labeled for unwanted clothing, but I am skeptical of these receptacles. To whom do you donate your used clothing? I’m willing to entertain any suggestions. I’m not trying to earn any money in exchange for my items, I just want them to eventually arrive in the hands of people who might need them.

While I ponder this and your suggestions, here are some personal finance articles you may enjoy.

Now Being an Authorized User WILL Get You Credit Scores Again. There was some talk about FICO preventing the good credit (or bad credit) pass along to “authorized users” of credit cards. This is traditionally one of the easiest ways for someone to establish a new credit history. Recently, FICO announced that it would not end the practice.

Hard Credit Check vs. Soft Credit Check. Cash Money Life explains the difference and why the type of credit check a company may perform matters.

What Michael Phelps and the U.S. 4×100 Freestyle Relay Team Taught Me About Debt. Have you been watching Phelps TV, otherwise known as the 2008 Beijing Summer Olympic Games coverage on NBC? If you haven’t heard, Michael Phelps has been winning the swimming events. Here’s a tie-in to personal finance.

Why You Need a Will and the Basics of Estate Planning. “You’ve worked hard for your money, pay taxes on the money you’ve earned, why not minimize taxation upon your death?” Indeed.

Make Money Blogging: Top Bloggers And How Much They Earn. If you’ve got something to say and people want to listen, blogging could be a good way to earn some extra money. It has worked well for me over the past few years, but not as well as it has for these “top” bloggers. Beware: you can’t judge your income potential by assuming you can earn as much as these folks. It’s like looking at the top swimmers in the Olympics and believing you can swim as fast as they can. Of course some can, but most will not.

The original version of this article, Donating Old Clothing and Blog Roundup, is copyrighted by Consumerism Commentary.

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When you’re a world class professional athlete, you’re in high demand. When you’re the best, or nearly the best, at your particular skill in the developed world, the payoff can be huge.

For example, right now, there is no one on this planet who can compare skills with Tiger Woods. Yes, every person in this world is unique and every person is special, but Tiger is special in a way that could increase the golf industry’s revenue by a billion dollars or more. He’s special in a different way. People will come from across the globe with open wallets to see him play. When Tiger is seen drinking Gatorade, the company that manufactures Gatorade believes he will inspire the world to do as well, with open wallets.

That’s why Tiger, through his winnings and endorsements, earned approximately $128,000,000 last year alone.

There are no surprises in the top ten earning athletes:

1. Tiger Woods: $22,902,706 from salary and winnings, $105,000,000 from endorsements
2. Phil Mickelson: $9,372,685 from salary and winnings, $53,000,000 from endorsements
3. LeBron James: $12,455,000 from salary and winnings, $28,000,000 from endorsements
4. Floyd Mayweather Jr.: $20,000,000 from salary and winnings, $20,250,000 from endorsements
5. Kobe Bryant: $19,490,625 from salary and winnings, $16,000,000 from endorsements
6. Shaquille O’Neal: $20,000,000 from salary and winnings, $15,000,000 from endorsements
7. Alex Rodriguez: $29,000,000 from salary and winnings, $6,000,000 from endorsements
8. Kevin Garnett: $22,000,000 from salary and winnings, $9,000,000 from endorsements
9. Peyton Manning: $17,500,000 from salary and winnings, $13,000,000 from endorsements
10. Derek Jeter: $22,000,000 from salary and winnings, $8,000,000 from endorsements

So who of these mass earners have established foundations?

Tiger Woods has the Tiger Woods Foundation. The foundation established the Tiger Woods Learning Center, where children develop their character by learning how to achieve their goals and reach their dreams.

Phil Mickelson runs the Phil and Amy Mickelson Charitable Gift Fund. This charity was a strong supporter of relief efforts following Hurricane Katrina and is a continuing supporter of Homes for Our Troops.

LeBron James is part of the LeBron James Family Foundation. Recently, this foundation has been working to build playgrounds in communities across the United States.

The Floyd Mayweather Jr. Foundation was created last year. This organization seeks to use construction, entrepreneurialism and education to encourage community alliances, youth leadership and stronger families.

In 2003, Kobe Bryant closed down his Kobe Bryant Foundation amidst the athlete’s sexual assault charges. Kobe now runs the Vivo Foundation, “a charitable initiative dedicated to enhancing the lives of young people and making dreams come true through educational and cultural enrichment opportunities and financial support.”

Shaq manages his Real Model Foundation, which has been noted in the press as being an adaptation of the term “role model” but with an emphasis on the idea that role models should be real. Actual details about this foundation and the work they have done is unclear.

Alex Rodriguez and his wife Cynthia run the AROD Family Foundation. The foundation’s mission is “to positively impact families in distress by supporting programs focusing on improved quality of life, education, and mental health. The foundation supports Boys and Girls Clubs events, the Children’s Aid Society, and other organizations.

Kevin Garnett’s foundation is called “4XL – For Excellence in Leadership.” This organization “connects minority high school and college students with business leaders and internet-based guidance, while preparing them for business-related careers and entrepreneurship.” The most recent information about this organization’s activities date back to 2003.

The PeyBack Foundation, run by Peyton Manning, seeks to help disadvantage youth build futures for themselves. This foundation has a strong presence in Indiana, Tennessee, and Louisiana, and also was a significant contributor to relief effort following Hurricane Katrina.

Derek Jeter launched the Turn 2 Foundation, Inc. in 1996. The foundation has awarded more than $8 million in grants since that time. Turn 2′s mission is to “motivate young people to turn away from drugs and alcohol.”

When it comes to foundations run by athletes, Major League Baseball seems to have a great handle on the organizations run by its players. These foundations, like AROD and Turn 2, in addition to the Tiger Woods Foundation, appear to be the most professional and well-managed of all the celebrity foundations. It is surprising to see how much information was not available pertaining to the foundations run by the other athletes.

The Fortunate 50 [Sports Illustrated]

The original version of this article, Foundations of the Rich and Athletic: What 10 Athletes Do With Their $30,000,000+ Annual Income, is copyrighted by Consumerism Commentary.

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In researching historical and religious views on charitable giving, I came across Maimonides’ hierarchy. He believed that there are 8 degrees of charity. These deal primarily with providing for the poor. Here are his 8 levels, from the highest to lowest. Do you agree with this assessment? How high are you on the list?

1. Investing in a poor person in a manner that they can become self-sufficient.
2. Giving to the poor without knowledge of the recipient and without allowing the recipient to know your identity.
3. Giving to the poor with knowledge of the recipient but without allowing the recipient to know your identity (anonymous giving).
4. Giving to the poor without knowledge of the recipient but allowing the recipient to know your identity.
5. Giving to the poor without or before being asked.
6. Giving to the poor after being asked.
7. Giving to the poor happily but inadequately.
8. Giving to the poor unwillingly.

What do you think?

The original version of this article, Maimonides’ 8 Levels of Charity, is copyrighted by Consumerism Commentary.

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Doodle Day is more than just a day, it is the set of all days between May 8 and May 18 inclusive. The purpose of naming this period of time is to draw attention to neurofibromatosis (NF), a common neural disorder. May is NF Awareness month, and to participate in Doodle Day, some celebrities are offering drawings and photographs for auction on eBay. All the proceeds go towards NF, Inc. for research for a cure and education about this disorder.

You can browse some of the celebrity offerings here, and I have to say I’m not familiar with all of the artists. If you’re interested in art by Candice Bergen, Jim Davis, Jeff Bridges, or Mickey Dolenz, you can purchase their doodles and support this particular charity. As of last night, the works of art going for the highest prices were created by Seth Green, Neil Gaiman, Gillian Anderson, and Ellen DeGeneres.

Have you ever participated in a charity auction?

The original version of this article, Doodling for Charity: Doodle Day, May 8 Through May 18, is copyrighted by Consumerism Commentary.

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At the end of 2007, I contributed $5,000 to a Fidelity Charitable Gift Fund that I created for myself to distribute to non-profit organizations later, once I selected a cause to support. This was a case of really bad timing; since then my account’s value has dropped 6%. Suddenly, I have $300 less to donate to charity. While I am receiving the tax deduction for the full $5,000, unless my account increases at least 6.4%, organizations won’t benefit from the full amount I donated.

I think I need to examine my allocation strategy in the Charitable Gift Fund. Perhaps I should keep the amount I intend to distribute in the coming year in a money market fund within the account, while everything else should be invested for the longer term in a broad stock index fund.

The original version of this article, A Case of Really Bad Timing, is copyrighted by Consumerism Commentary.

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I’ve had charity on my mind lately, and it seems to be affecting what I write about. During my normal reading, I came across a Washington Post article about what is apparently an increase in philanthropy among teenagers and younger children.

Young children and teenagers across the nation are getting involved in philanthropy more than ever, according to research and nonprofit experts, who credit new technologies with the rise of the trend. As young people increasingly become exposed to and connected with the problems of the world via the Internet and television, experts said, parents are finding new ways to instill in their children the value of giving. At the same time, technology is democratizing philanthropy so giving is not only easier for people of all ages and means, but also trendier. And children are starting to organize at the grass-roots level to give…

The scale of money children are raising through new technologies or giving away through charities is “mind-boggling,” said Lucy Bernholz, founder and president of Blueprint Research and Design, a leading consulting firm for nonprofit organizations. “It used to be the pennies we raised through UNICEF boxes, and now you’re talking about 15- and 17-year-old children who are savvy enough and committed enough to raise tens of thousands of dollars and sending it halfway around the world,” Bernholz said.

The article contains many examples of teenagers and children who are outpacing my own giving. According to the research, much of this increase in giving is driven by affluent families who include children in their charity decisions. Philanthropy isn’t just for the affluent, as I’ve discovered lately. In just the Fidelity Charitable Gift Fund, the pool of donors recommended over $1 billion in grants to charities last year. As I’ve written about recently, this type of fund gives smaller-time investors and “thousandaires” like me access to some of the benefits that millionaires have when they create and administer foundations.

I don’t remember knowing much about philanthropy when I was a pre-teenager. I was certainly aware of global issues; Live Aid was a major force back then. I didn’t see myself in a position to support the causes other than buying memorabilia for which proceeds went to support various charities. Thanks to technology, more opportunities for giving are available to more people.

image credit: zugaldia
For Modern Kids, ‘Philanthropy’ Is No Grown-Up Word [Washington Post]
Gift Fund Donors Set Record for Giving in 2007 [Fidelity]

The original version of this article, More Children are Budding Philanthropists, is copyrighted by Consumerism Commentary.

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There’s been some discussion on this site recently regarding disclosure of charitable donations. I can understand why some might wish to keep this information private but I’m not at all shy about telling you which organizations I choose to support.

This year, I made donations to the following charities:

* Oceana – The largest international ocean environmental advocacy group dedicated to protecting and restoring the world’s oceans and its sea turtles, sharks, dolphins, whales, endangered species, and marine ecosystems.

* Union of Concerned Scientists – The leading science-based nonprofit working for a healthy environment and a safer world. UCS combines independent scientific research and citizen action to develop innovative, practical solutions and to secure responsible changes in government policy, corporate practices, and consumer choices.

* Conservation International – Applies innovations in science, economics, policy, and community participation to protect the Earth’s richest regions of plant and animal diversity and demonstrate that human societies can live harmoniously with nature. Works in more than 40 countries on four continents to help people find economic alternatives without harming their natural environments.

* The National Multiple Sclerosis Society – Provides advocacy, professional education, research funding and support for those living with Multiple Sclerosis.

* The Raptor Trust – Provides care and assistance for injured wild birds and aims to educate the public about conservation issues related to birds, especially birds of prey.

I also made material donations to the Military Order of the Purple Heart Service Foundation, which benefits wounded, disabled, and handicapped veterans.

But there are a number of other types of donations I’ve made which may not count for tax purposes but count in myriad ways to me:

I’m an avid Freecycler, and donated over 35 items this year to those who needed them, including a giant standing freezer I gave to a local school for underprivileged children. Apparently this donation will be keeping them in ice cream parties for a long time to come.

I also save all my egg cartons for a local independent chicken farmer, and have brought over at least 100 cartons this year (I do a lot of baking). Since farmers in my area have a lot to contend with, this bit of recycling helps to keep at least one of the expenses down for a farm which appears to be barely breaking even.

And then, as always, there’s the active practice of channeling my spending towards organizations and businesses I believe in, using my purchasing power to support their continued growth. For instance, in 2007, 71 percent of my total grocery budget went to support local agriculture and small businesses. I hope to grow this percentage even further in 2008.

Today’s the last day to donate for the 2007 tax year; did you reach your giving goals?

The original version of this article, 2007 Charitable Donations, is copyrighted by Consumerism Commentary.

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Last week, I mentioned I met my goal for charitable giving for 2007. The modest goal, which I set for myself at the end of last year, was to provide $1,000 in support of an organization meaningful to me. This year, I decided to separate myself further from the organization I normally support, which also happens to be a former employer. It’s not that I don’t believe in what they do, but I have some issues with their methods.

I want to make sure my money helps an organization reach its stated goal, and I will only give to an organization whose goals, mission statement, and vision match my own values. In addition, it helps to have a strong knowledge of the inner workings of the organization. Unfortunately, it’s this strong knowledge that has turned away from the group I formerly supported.

This past year, I’ve had difficulty coming up with a replacement besides the pfblogs.org Financial Literacy Challenge. This has been a frustration for me, particularly because I wouldn’t mind managing an arts education foundation of some sort. While researching methods for starting a foundation — an endeavor better attempted by someone with millions of dollars ready to be dedicated and willingness to spend a lot of money just to run the foundation — I came across the idea of the charitable gift fund.

The charitable gift fund allows me to make a contribution to a general fund now without specifying a direct recipient. That also allows me to take a tax deduction for the contribution this year while taking my time to decide where the money should go. In the mean time, the funds are invested and presumably appreciated along with the rest of the stock market.

Charitable gift funds, or more specifically donor-advised funds, are organized by several brokerages and public charities. I chose the Fidelity Charitable Gift Fund thanks to its low barrier of entry (only $5,000 to open an account and subsequent investments must be at least $1,000) and its relatively low fees (0.6% including the underlying expense ratios, with a minimum of $100).

In return for the ability to take the tax deduction now, I give up my ability to manage and distribute the funds directly. However, I can recommend grants to charities as long as they are registered under regulation 401(c)3, and therefore legal non-profit entities. It would be very rare for Fidelity or any other custodian to reject a donee suggested by the donor as long as the organizations are not-for-profit and the donor doesn’t directly benefit from the organization’s receipt of the funds.

When I sent in my $5,000 to establish my donor-advised fund, I selected to invest the money in Fidelity’s Spartan 500 Index Fund (FSMKX), which carries an expense ratio of 0.1%. I could have transferred securities or other assets to the fund, but I opted to send cash. Unfortunately, they don’t support ACH transfers, so I had to write a check. A wire would have cost extra money.

Now that the fund is established, I can suggest grants at any time in amounts of $100 or more. The $5,000 I sent to the Fidelity Charitable Gift Fund is irrevocable, so it can only be used for charity. I’ve surpassed my “stretch goal” of $2,000 for 2007. In the process of establishing the fund, I sort of circumvented the most important part, getting that money into the hands of organizations for their use towards their missions. However, I’ve ensured that once I select recipients I will be contributing more than I would have otherwise.

If you’re interested in starting your own philanthropic endeavors through a charitable gift fund, here are some resources to get you started.

• Fidelity Charitable Gift Fund (minimum of $5,000 to establish an account)
• Vangard Charitable Endowment Program: Donor-Advised Funds (minimum of $25,000 to establish an account)
• National Philanthropic Trust: Independent Charitable Gift Fund (minimum of $25,000 to establish an account)
• Charitable Gift Trusts at The Motley Fool
• You Can Be Your Own Charitable Foundation at MSN Money

photo credit: johntrainor

The original version of this article, Small-Time Philanthropy: The Charitable Gift Fund, is copyrighted by Consumerism Commentary.

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‘Tis the season to think about charitable giving, and there are some wonderful opportunities to do this while giving to your friends and loved ones. Whether it’s one of your favorite causes or one which aligns with the interests of the recipient, there are three simple ways to make a doubly-impactful gift this holiday season.

1. Buy Christmas/holiday cards which support your charity of choice

If you’re going to buy cards this year anyway, why not see if your favorite charity has anything to offer? Not only do you show your support, but you may find interesting, unique cards which stand out to their recipients.

* The Audubon Society has a stunning array, and 10% of each box goes to serve their cause.

* The Make-A-Wish Foundation will actually personalize and mail your cards for you if you wish to make a gift on someone else’s behalf. Or you can order blank cards and send them yourself.

* The American Diabetes Association offers cards which you can personalize regardless of whether you are making a gift donation as well.

* Defenders of Wildlife offers free personalization of up to 4 lines when you order 3 or more boxes of cards, plus the cards are really wonderful for animal lovers.

* Sierra Club has an array of cards ranging from adorable polar bears frolicking in the snow to stunning National Park landscapes.

2. Buy gifts which provide a percentage to charity

* Know someone who loves the water? Oceana has some really cool t-shirts and apparel, and as much as 25% of the proceeds benefit their charity.

* Sierra Club offers two gorgeous gift-boxed calendars, note card sets (the owl set is my favorite) and even books for the nature/scenery lover in your life.

* The American Red Cross Store offers a number of smart gifts for the practical people in your life who always like to be prepared. Start with the $5 emergency kit as a stocking stuffer or spring for an emergency radio or more extensive kit. They’ve even got a line of vintage-style and baby clothing and some cute wrapping paper to package it all up.

* UNICEF has a store full of interesting, international gifts, including candles, journals, and books.

* A cancer survivor or supporter might enjoy jewelry, clothing or a tote bag from the American Cancer Society Gift Shop.

3. Donate to charity as a gift

* Oceana is offering a holiday adopt-a-creature program. For $35, you can adopt a dolphin, seahorse, or one of 16 other sea creatures and receive a cookie cutter in the shape of that creature and a special sugar cookie recipe. For $75, you can choose a set of 4 creatures, or for more, you can get the full set with an oven mitt or two included. It’s a nice way to donate while still having a fun gift for the recipient to open and enjoy.

* Oxfam America offers you the unique opportunity to present your friends and family with a sheep, a can of worms, or other amusing gift. You are donating your funds to purchase items needed by growing communities worldwide, but you get a very charming personalized card announcing your gift in any of a number of categories relevant to the recipient, from gardener to student. How else could you possibly gift wrap a camel?

* Heifer International also donates livestock to countries in need. You can choose from a variety of animals, including a llama for $150.

* American Forests lets you plant trees in the name of a loved one for $1 a tree.

* Alternative Gifts International offers truly impactful gifts of of food, shelter, trees, gardens and medicines around the world.

* Not sure what charity would be most fitting? JustGive.org sells gift certificates which can be redeemed for any of 1,000,000 charities and nonprofit organizations.

There are so many more charities out there offering personal, interesting and impactful holiday gifts. What are your favorites?

The original version of this article, Holiday Gift Guide, Part 1: 3 Ways to Incorporate Charitable Giving, is copyrighted by Consumerism Commentary.

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This is a guest post from Steve, who writes about finance and life at Brip Blap.

As the holiday season approaches, calls for donating to charity begin to multiply. Americans donate over $240 billion per year to various charities, and that’s simply in terms of money; the contributions in goods and services add even more to that number. This is a brief guide to the biggest questions about charitable giving in the US.

Decide what’s right for you. First of all, you need to come up with an idea of the type of charity you want to support. The list is almost endless. There are small local charities that benefit a very specific area, and there are gigantic global charities that help around the world. There are charities that try to offer direct help, and those that try to raise awareness. A few things you should consider before deciding on a charity:

# Is it a “good” charity?
# How will you contribute?
# Will you receive a tax deduction?

Is it a “good” charity? Make sure you agree with the charity’s stated aims. Try to understand what percentage of your contributions will go where you think they need to go. The IRS has a Form 990, “Return of Organization Exempt From Income Tax.” This form is probably your single best piece of information about a charity, because it’s the way the government prevents abuse of tax-exempt status.

There are almost 2 million American charities; specifically you should seek out “qualified organizations.” A qualified organization is called that because it qualifies for a tax deduction. These organizations include religious groups, public schools, not-for-profit hospitals, parks and a variety of other groups. If the organization is not qualified there is no barrier to giving to that group, but your donation will not be deductible.

You can view a charitable organization’s Form 990 to find out more about that organization’s mission and programs. The IRS Form 990, “Return of Organization Exempt From Income Tax,” can be thought of as the financial statements of a nonprofit organization. The form gives information about the organization’s finances and how money collected is spent. Keep in mind that although some groups may spend more on overhead than others, that does not necessarily disqualify a group from your consideration. Larger nonprofits may have more expenses for outreach or large, multi-year projects. If you have any concerns about how the money is being spent, you should contact the organization and ask them for more information; if they won’t provide it, that’s a good indicator!

Resources:
* Guidestar
* Charity Navigator
* IRS Form 990 [pdf]

How will you contribute? There are three basic ways to contribute to charity: money, goods and time. All three have value, and you should never let yourself feel badly because you can give one way and not another. A busy traveling salesman may not have the time to work hands-on with a charity group, but he can donate money or goods. A college student may not have extra cash or goods but can certainly contribute time. Everyone can give something:

* Give money. Obviously this is the simplest way to contribute, and usually it can be done quickly by going to a web site or mailing a letter. Many charities struggle to raise money, and every little bit counts.
* Give goods. You may think that old, gently worn coat will never been worn again, but there are plenty of organizations who would be thrilled to give that coat to someone who needs it. Clothes, books, almost anything that is in decent condition can be given to worthwhile organizations like the Salvation Army.
* Give time. A lot of people give money and goods to charitable organizations, but many of them need the gift of your time more than anything. From answering phones to building houses, many organizations deeply appreciate the time you can give them to help them spread their message or even complete their core missions. You can even under certain circumstances donate your professional services to an organization.

Will you receive a tax deduction? Some people may think that it’s improper to discuss tax writeoffs when talking about giving. The US government has chosen to create an incentive to giving, though, and there’s no reason not to take advantage of it. Of course, if you can only really receive the benefit of these deductions if you itemize. If you give money or other gifts (stocks, goods, etc.) and the charity has the proper Internal Revenue Service (IRS) status, you may be eligible to deduct some or all of your contributions. The rules have been significantly tightened in 2007, however. A few basic pointers:

* Starting in 2007, you need a receipt for ANY donation. The old limit of $250 has been eliminated, so even a $10 bill in the collection plate requires a receipt if you want to deduct it.
* You may deduct up to 50% of your adjusted gross income in one year for charitable donations (certain contributions, though, may have lower limits).
* If you give more than 50%, you can carry the excess forward for up to five years.
* If you donate goods to an organization, it must be in good condition or better in order to be deductible – and if it’s worth more than $500 you have to get a professional appraisal to prove its value.
* If you receive something in return for your donation, you can only deduct the excess of your donation over what you received; so if you paid $100 for a charity dinner with a value of $30, you can only deduct $70.

Your best resource for figuring out the rules? Go to the source: Publication 526 from the IRS website. (This is the 2006 version; 2007 is not yet available.) If you have any concerns, make sure you talk to a tax professional about your specific situation.

While there are a lot of rules surrounding the deductibility of donations and a lot of suspicion over some recent charity scandals, it is important to remember that the great majority of charitable organizations exist for one reason: to help. As the holidays come, it’s important to remember those less fortunate, and extend what help you can. You can even be a little selfish, because one of the biggest benefits of giving is that you’ll feel great about doing it!

Read more from Steve at his blog, Brip Blap.

The original version of this article, 3 Things You Need to Know Before Giving to Charity, is copyrighted by Consumerism Commentary.

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Thank you to everyone who has chosen to support the pfblogs.org Financial Literacy Challenge at DonorsChoose. Since my first post on Monday about raising funds for teachers who intend to bring money management and entrepreneurship lessons to the classroom, several projects have been completely funded by bloggers and readers.

Our challenge has climbed to fifth place on the leaderboard for the higheset amount donated, with $1,605 contributed so far. The goal for the Financial Literacy Challenge has been increased to $2,000.

If you believe that children should learn more about personal finance in school, this is your perfect chance to make that happen. Here are some of the latest projects that have been chosen for the Financial Literacy Challenge.

Touch Money From The Heart. I am a High School Special Education-Life Skills Teacher in a school that is approximately 37% low income. The students that I teach are between 14 and 22 years of age and have multiple mental and physical disabilities…

I am requesting the TouchMoney Kits to aid me in teaching my students to count coins… I am trying to prepare my students for further independence in the real world. They need to be able to go to the grocery store and buy their groceries for the week. They need to be able to pay their bills, however minimal that might be. Right now most of my students would not be able to do this.

Funny Money Auction Math. I teach 4th grade at a mid-sized school where the children are placed in homeroom math classes randomly rather than by ability… I want to build a strong community of mathematical thinkers and reasoners. Auction Math will go a long way towards helping children not only love math, but also become life long learners in the area of money management, building a savings, and investing wisely…

Children will complete challenging math activities and play high level math games that will correspond to the content being presented through the regular math curriculum. Each time a child wins a game or completes an activity, he will earn funny money to put in his account in the Funny Money Auction Bank… Once a week I will hold a classroom auction where students will have a chance to invest their savings in something that interests them. Auction items will range in value from small school supplies to coupons for items at local restaurants…

There are more projects included in the challenge, and you can find out about them and donate here before the challenge ends on October 31. Thanks again to everyone who has donated so far.

HC from One Big Mortar Board, who organized the challenge, is sweetening the pot for those who have donated by offering a raffle. Also, see One Big Mortar Board for more information about the projects that are included in the challenge.

The original version of this article, Update: Financial Literacy Challenge Gaining Momentum, is copyrighted by Consumerism Commentary.

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HC at One Big Mortarboard has organized a campaign to raise a total of $1,500 out of about $1,900 remaining to fully cover four projects focusing on bringing money management skills to the schools. Teachers have personally submitted these projects to DonorsChoose to find funding. One project, in which elementary school students will be provided checkbooks and taught the skills needed to work with checking accounts, has already been fully funded. Once these four projects are fully funded, we have four more proposals waiting on deck relating directly to personal finance. Here are the details on the four programs searching for funding.

DonorsChoose is a quality organization that seeks to “improve public education by engaging citizens in an online marketplace where teachers describe and individuals can fund specific student needs.” The organization puts donors in touch with teachers who are in need of resources to help them to teach in the best manner possible, and provides a way for the donation to qualify as charitable for tax purposes. DonorsChoose also works hard to ensure that those asking for funding are vetted for integrity.

I have taught in public schools, and many in my social circle are teachers now, so I understand how frustrating it can be to provide thorough instruction when public schools cannot provide the resources necessary. Just like you can’t teach history with 25-year-old textbooks and you can’t teach music without instruments, you can’t teach money management without piggy banks, checkbooks, office supplies, or any other materials the teachers deem important.

Please consider sending some funds this way, particularly if you feel that not enough is being done to teach money management in schools. Here are four projects waiting to make an impact on 100 or more children, and all they need are small donations from personal finance bloggers and readers.

To choose the project you’d like to support, visit the pfblogs.org Financial Literacy Challenge. My donation will partially fulfill my charitable giving goals.

For those bloggers or readers concerned with anonymity, your may place your donation anonymously. Even if you choose to use your real name, it won’t be publicly released.

Image credit: LizMarie

The original version of this article, pfblogs.org Financial Literacy Challenge at DonorsChoose, is copyrighted by Consumerism Commentary.

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When I laid out my goals for 2007 at the end of last year, I set my sights on donating $1,000 to charity — $2,000 as a stretch goal — in addition to my normal volunteering efforts. Neither of these two options are going as well as I expected.

I decided to sever ties with the organization with which I used to be heavily involved. They are no longer local to me, but more importantly, I don’t believe that what the organization does is always in the best interest of those they believe they are helping. I’ve decided to pull back my support, but I need a replacement.

My support will probably be redirected to a small foundation that supports arts and music education. I know that my support at the organization I formerly supported made a difference for the group and the young people in its purview, and it will be much more difficult to make such a difference with a foundation with which I am not as intimately familiar.

I’ll be reaching out to my contacts in the industry to ask for their suggestions as well as researching organization online. I’d like to find a local foundation with only a few programs that support the same values I feel are important in terms of education.

How do you choose the recipients of your charitable funds?

Image credit: StuSeeger

The original version of this article, Time Running Out for My 2007 Charity Goals, is copyrighted by Consumerism Commentary.

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Money Magazine suggests eight money moves people should consider for the end of the year. Here are some thoughts.

1. Take your losses. Money suggests selling poor-performing stock to offset ordinary income for tax purposes. In my opinion, this depends on the stock. If the future does look bleak, go for it, but if there is some reason to believe there is a comeback around the corner, hold on. (Efficient market theory suggests that any widely-known “comeback” is already represented in the stock’s price, so this may not work for you.)

2. Buy some aspirin. If you have any money left over in your flexible spending plan, particularly if yours is of the use-it-or-lose-it variety, stock up on eligible pharmaceutical items you know you’ll use before they expire, like aspirin. Your deadline for using the funds may extend into next year, so the push may not be as urgent — check your company’s policy.

3. Be generous. Give money to your favorite charity or non-profit organization, and you can reduce your tax liability. I would like to think that isn’t the only reason people support causes, but it does help. Money suggests setting the money aside in a Charitable Gift Fund to get the tax deduction now while postponing the distribution to a later date, when the donor has had time to determine where it should be sent.

4. Get IRA smart. Anyone 70 1/2 or older must start taking the required minimum distribution from IRAs. If the minimum isn’t met, there is a significant penalty. Alternatively, you can donate your distribution to charity and avoid withdrawal taxes.

Part 2 will summarize the second half of Money Magazine’s year-end money moves.

The original version of this article, Money Magazine: 8 Smart Year-End Moves, Part 1, is copyrighted by Consumerism Commentary.

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Microsoft announced today that Bill Gates will be leaving the company in July 2008 to concentrate on the Bill & Melinda Gates Foundation, which currently has $29.1 billion in assets.

Have you ever considered starting your own foundation? According to the Washington Regional Association of Grantmakers, if you meet the following qualification, starting a foundation may be right for you:

* You want to leave a lasting imprint on society or you wish to perpetuate a certain viewpoint or philosophy.
* You are searching for a form of giving that can unite family members around a purposeful mission.
* Your annual giving is significant and you would like to be more strategic about the causes you support and how you support them.
* You would like to create a protective buffer between you and those asking for your financial support.
* You have significant or anticipate significant assets you can use to launch and/or endow a private foundation.
* Your giving has become complex and unwieldy, and it requires administrative support.
* You feel a responsibility or a desire to be leader in your community.
* You would like to avail yourself of the considerable tax advantages.

What does it take for your assets to be considered “significant?” The association suggests that at least $25,000 should be available for distribution through grants each year. If your assets produce that amount through income (endowment or annual contributions), and you’re willing to part with that amount, then your assets are considered “significant” for the purpose of starting a foundation.

In addition to Washington Grantmakers, the Council of Foundations is a good resource. They have numerous publications for sale that may be of interest.

Right now, 20 people want to start a foundation on 43 Things.

The original version of this article, Bill Gates is Out! (How You Can Start a Foundation), is copyrighted by Consumerism Commentary.

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Punny Money will be blogging for 24 hours straight in a marathon session starting tonight. His mom passed away of cancer some time ago, and this is the blogger’s way of paying tribute:

All advertising, referral, and other revenue earned by Punny Money during the 24-hour marathon period will be donated to the Susan G. Komen Breast Cancer Foundation.

Check out Punny Money and refresh the website every few minutes. If his server crashes, it’s a sign he’s getting the readers (and hopefully the support) he’s planning to make it worthwhile for the Foundation.

The original version of this article, Punny Money To Blog For Cancer, is copyrighted by Consumerism Commentary.

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I received a call from one of my favorite organizations the other day, and I decided to double my charitable contribution for the year. I’m still not giving enough to qualify for tax incentives, but that’s not my goal. I also give many hours of my time over the summer and fall, volunteering in various capacities at their events.

Last year, I spread the contribution over the course of the entire year, but that probably wasn’t necessary. I’m in a better financial position now — especially with my new job starting at the end of this month — and I could probably swing a couple hundred bucks in one shot.

The original version of this article, Increasing Charitable Contributions, is copyrighted by Consumerism Commentary.

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Will you take this pledge? Can you assert that you will give 10% of your income over $100,000 to charity — any charity? This is what hundreds of people have done, and I’d imagine many more will, at ten over one hundred.

We’re making this committment because we think it will help make the world a better place, and we’re encouraging people to make the same promise to themselves and to their friends. If you don’t make $100,000 yet, pledge for the future and donate what you can now.

You can pledge anonymously or including your name and photograph.

The original version of this article, Ten Percent of Income Over One Hundred Thousand Dollars, is copyrighted by Consumerism Commentary.

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You can file this in the “I never looked at it from that point of view” file. Charities are for suckers. The article argues it’s supposed to be the government’s job to support those less fortunate, as that is one of the purposes of collecting taxes, and shouldn’t be up to the collection of private donations.

Government has been shirking its basic responsibilities since the ’80s, when
Ronald Reagan sold us his belief that the sick, poor and unlucky should no longer count on “big government” to help them, but should rather live and die at the whim of contributors to private charities….

There’s only one reason flood victims aren’t getting help from the government: because the government refuses to help them. The Red Cross and its cohorts are letting lazy, incompetent and corrupt politicians off the hook, and so are their donors…

The U.S. government can easily pick up the tab for people inconvenienced by bad weather–if helping them is a priority. That goes double for Katrina, a disaster caused by the government’s conscious decision to eliminate the $50 million pittance needed to improve New Orleans’ levees.

It’s kind of a cold-hearted view. When people are in trouble, it’s human nature to want to help. It does sound that the government has a plan now, although some would argue it’s a bit late.

The original version of this article, Don’t Donate to Katrina Victims, is copyrighted by Consumerism Commentary.

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While it’s impossible to truthfully claim that everything has been said about the disaster that was Hurricane Katrina, there certainly has been an incredible amount of discussion on and offline. Rather than repeating what surely everyone has heard by now, I’d rather just point any giving-minded readers towards what I think is the best starting point, the Katrina Help Wiki. Another good starting point is nola.com (The Times-Picayune Online).

Before making any monetary donations to an organization, make sure you have done sufficient research. There are people trying to make a couple bucks off other people’s tragedy. Be aware of the existence of scams before signing the check or clicking the “Paypal Donate!” button.

The original version of this article, Hurricane Katrina, is copyrighted by Consumerism Commentary.

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A new report by the Giving USA Foundation announces that charitable giving incerased 5 percent to almost $250 billion in 2004, and that doesn’t even take most of the tsunami relief into account.

The two categories of organizations receiving the largest amounts of contributions are religious groups and education. Smaller organizations were more likely than larger organizations to see a drop in contributions from the previous year.

Charitable giving is not exactly a hallmark of living the simple life and managing expenses for those of us who do not have thousands of dollars to spare each year. However, some people may find it more manageable and meaningful to donate their time rather than money. There’s no tax deduction but volunteering for a project or event often helps an organization in a more meaningful way than money.

The original version of this article, Generous USians, is copyrighted by Consumerism Commentary.

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