How Charitable Are Americans?

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Americans are good at making money -- but we're also good at giving it away.

In 2011, we came in first place as far as generous nations go in the Charities Aid Foundation's World Giving Index. However, in recent years we've slipped.

Australia took the cake for giving in 2012, followed by Ireland, Canada, and New Zealand. The U.S. came in fifth place.

America's charitable giving can be emotional, highly variable, and downright astonishing. Here are the facts, as well as tips on how to be an effective philanthropist.

Who's Most and Least Generous

The World Giving Index takes a survey-based approach and, according to the survey, 42 percent of Americans said they'd volunteered in the last year, 57 percent reported donating money, and 71 percent reported helping a stranger.

%VIRTUAL-article-sponsoredlinks%But not all Americans give equally. The Chronicle of Philanthropy has crunched numbers on charitable deductions data, and the results are fascinating. Mormon tithing seems to lifted Utah -- the average household gives away 10.6 percent of its discretionary income, the highest level in the nation. It's no single state fluke, either. More religious parts of the U.S. are also more generous. And a new study released in October found that 23 percent of Jewish Americans include charities in their wills -- almost twice the percentage of non-Jews.

Politics also appear to correlate to charitable giving. The eight most giving states all voted for John McCain in the last presidential election, while the seven least charitable states voted for Barack Obama.

And don't let anyone tell you Southern hospitality isn't real. Mississippi, Alabama, and Tennessee follow close behind Utah's first place, while Vermont, Maine, and New Hampshire bring up the rear.

But The Chronicle's most intriguing numbers come from an examination of our nation's richest and poorest neighborhoods. Of the wealthiest 1,000 ZIP codes, only nine of them also appeared on the top 1,000 list for share of income donated.

Interestingly, households earning more than $200,000 a year that are clustered in wealthy neighborhoods are less generous with their paychecks than average. While they accounted for 41 percent of total charitable donations, that absolute number only adds up to 2.8 percent of discretionary income. That's lower than the overall giving rate in 98.9 percent of all but four of the country's 344 metropolitan areas.

Making It Count -- for You and the World

How much you give is only part of the equation of making donation dollars really make a difference. "Every little bit helps" isn't necessarily true when it comes to charities. There are plenty of ineffective organizations out there, and some that are so inefficient with the money they raise that they're may be causing more harm than good.

Identifying responsible charities can be tricky, but it's worth the work. Pick your charities like you pick your stocks -- excellent management, effective strategy, and long-term value added for all stakeholders are three signs of a solid organization. is a good starting point, but firsthand experience or advice from a trusted friend can often go just as far.

Tax-deductible donations are a nice draw, and investors can make their stocks go further by chalking off the full amount of earnings to charities -- without having to deduct capital gains.

Start Making a Contribution

While the richest Americans may be able to give more on a dollar-for-dollar basis, you can start with any amount. Allocating a specific percentage of your income, no matter what size, is a surefire way to start making a difference.

Some folks feel the urge to give back to their communities, while others look abroad at the global inequalities that exist. You might have a connection to something that's affected you or a friend, or perhaps you feel strongly about a statistic that strikes you as being unjust. Whether it's people, places, or problems in general, there are plenty of opportunities.

Also, giving doesn't have to mean money. While it's not tax-deductible, volunteering your time and expertise can sometimes go even further. Not everyone's in a position to donate funds, and lending a helping hand can move mountains for some organizations.

The U.S. may have slumped to fifth place in last year's World Giving Index, but we've got every ability to make up lost ground. Find what works for you, stick to a strategy, and do your part to make some surprising statistics for next year's report.

10 Smartest Ways to Give to Charity ...
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How Charitable Are Americans?
With so many people pinching pennies, charitable donations are down as compared to 2007. In fact, a full 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.

First Up: Charitable Tip No. 1
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."
Next: Charitable Tip No. 2
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 most 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 and parking costs) are.
Next: Charitable Tip No. 3
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. And, if you have any non-perishable food items collecting dust in your pantry, consider donating them to a food drive. Be sure that you get a receipt for any non-cash donations that you make.
Next: Charitable Tip No. 4
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.
Next: Charitable Tip No. 5
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!
Next: Charitable Tip No. 6
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, 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. If you have other electronics, such as a computer that you want to donate, Goodwill and other similar organizations may take it. Just be sure to check with your local store before you haul it over there. And protect yourself from ID theft by removing all data from the hard drive first!
Next: Charitable Tip No. 7
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 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. Check out your favorite charity's Web site for other ideas.
Next: Charitable Tip No. 8
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.
Next: Charitable Tip No. 9
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!
Next: Charitable Tip No. 10
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.
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