Smartest ways to give to charity - even in tough times

'Tis the season for giving. Unfortunately, with so many people pinching pennies, charitable donations are down as compared to 2007. In fact, 35% of charities have reported significant declines.

The timing couldn't be worse. Thanks to this financial crisis, the need is greater than ever. Requests for food have soared 50%, according to a recent Feeding America survey.

So before you decide to cut back your charitable donations, let personal finance experts Ken and Daria Dolan show you ways that you can help without breaking the bank. Learn the benefits of charitable giving and how to make the most of every dollar that you give.

Find the smartest, most efficient charity for you
Before you give to any charity -- even one you have donated to in the past -- be sure that the charity is putting your hard-earned money to good use.

You want a charity that spends less money to raise more money. A top-notch charity should spend a good portion of its budget -- at least 75% -- on supporting its actual programs. That means spending a minimal amount on things such as administrative costs. A good place to start your research is, which rates charities of all kinds based on their ability to raise donations and how efficiently they "spread the wealth."

Deducting your donation
One of the benefits of charitable giving is the ability to deduct your donation from your federal income tax. Just keep in mind that certain rules apply.

If your charity is tax-exempt, you may or may not be able to take a tax deduction on your donation. Most of the popular charities are set up as 501c(3)'s, which ARE tax-deductible. 501c(19)'s and certain types of 501c(4)'s are as well.

Remember that your contributions are deductible for the year in which you actually paid for the donation. Also note that your time is NOT deductible ... however, expenses incurred during volunteer time (such as mileage) are. In fact, you can deduct 14 cents per mile, along with any toll and parking costs.

Giving isn't just about cash
You don't need to dole out a wad of cash in order to do the right thing. In fact, you might be surprised at the number of items you have at home that could have tremendous value for a needy organization.

Clothing and shoes are almost always needed -- especially for children and women. School clothes, coats and cold-weather accessories are constantly in high demand. These types of donations should be clean and undamaged. Furniture is also in high demand. You can check out the fair market value of these items at or

And if you have any non-perishable food items collecting dust in your pantry, consider donating them to a food drive. You can find drop-off locations at your local churches, grocery stores and large retail chains. Be sure that you get a receipt for any non-cash donations that you make.

Donating a car
Yes, you can still donate a car to charity and, yes, it can still be tax-deductible. But the rules have recently changed, so it's not as easy or beneficial as it used to be.

First off, if the vehicle is worth more than $500, you need to get the charity to acknowledge this in writing. Also keep in mind that the IRS limits the value of the deduction to the amount the charity sold the car for. So if you donated a car worth $5,000 and it sold for $500, you can claim only $500 as your deduction.

Be sure to get a receipt from the charity that lists the final sale price.

This Voids Your Tax Deduction
A word of warning when it comes to donating your car: Watch out for auto salvage firms that buy the right to use a charity's name. These firms agree to pay the charity a certain dollar amount (based on the number of cars they receive or their value), but neither the car nor the proceeds actually go to the charity.

If you donate to one of these outfits, you don't get ANY deduction at all because you've given to a FOR-PROFIT company. Donor beware!

Cell phones and electronics
If you are like us, you have some old cell phones or PDAs lying around the house. Recycle your old cell phones, PDAs and even iPods, and help out a charity at the same time.

One of the easiest ways is through Recycling for Charities (RFC), a non-profit organization that allows people to donate these items for a price to be paid to the charity of their choice. Your old gadget is either refurbished or cleanly disposed of. No landfills required-yet ANOTHER way you'll have done a good deed!

If you have other electronics, such as a new or used computer that you want to donate, GOODWILL and other similar organizations will take it. Just be sure to check with your local store before you haul your computer over there. And protect yourself from identity theft by removing all data from your computer's hard drive before donating it!

Donating your Time
Cash isn't the only way you can make a difference. Charities of every shape and size need the gift of your time. You can help work with the people in need-such as working at a homeless shelter or soup kitchen. You can also find volunteer jobs behind the scenes such as helping out with office and other administrative work.

You can search for volunteer positions at Network for Good. Many individual organizations also have their own listings. For example, Make-a-Wish Foundation has a sign-up area on its site for those who want to donate their time and talents to a wide variety of tasks -- anything from event planning and office help to language translation and public speaking. Check out your favorite charity's web site for other ideas.

Give and get a unique experience in return
You can get more than a warm and fuzzy feeling when you give -- depending on the charity and its offer, you could enjoy something you've never tried before!

Many charity auctions give away unique experiences in exchange for donations. The "prize" might be dinner with a top celebrity or private lessons with a favorite golf pro.

Keep your eye out for these types of events. They can be great ways to give to a good cause and get a nice tax deduction. PLUS you could also have an experience you'll be telling your grandchildren about someday!

What you normally can't buy ... can be yours
How'd you like an oil painting created by your most beloved movie star? Or an autographed baseball from your all-time favorite pitcher? Or a piece of furniture from a classic TV show?

Those are just a few examples of things that you can't buy in stores that can be yours for the right price to a charity.

These items are typically donated by celebrities who want to find their own way to give to a worthy cause. The charity then takes these items and puts them up for sale or auction, with proceeds going towards running the program.

It's a great way to get truly one-of-a-kind items while experiencing the true joy of giving!

Scam e-mail solicitations
Unfortunately, not everyone acts from the goodness of their heart this time of year. There are plenty of scammers out there looking to take advantage of your kindness, so please beware.

One scam that's on the rise involves email and big-name charities. You open up your e-mail and see a message from a big name organization such as UNICEF or Salvation Army. They're asking for donations with a handy link and associated web site to contribute. Problem is, they're all bogus - the e-mail, the web site ... ALL of it!

You're better off DIRECTLY visiting the charity's web site and making your donation there, or by calling their toll-free number if they have one. Again – donor beware!

These are tough times indeed ... but the need has never been greater, so please step up to the plate and help in any way you can. Believe us, NOTHING feels better than giving to those less fortunate - especially now. Whether you can only scrape together a few bucks or a few hours, THAT'S valuable.

Please help where you can using the tips we've passed along to you today. You'll do a whole lot of good AND will reap the benefits for yourself as well!

Let personal finance experts Ken and Daria Dolan of show you ways to save money, protect your investments and avoid common money mistakes.
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