Last year almost 18 percent of donations to charitable organizations were given during December, according to the 2012 Charitable Giving Report prepared by Blackbaud of Charleston, S.C., which supplies software and services for nonprofit organizations. That’s twice as much as was contributed in any other month. If you’re contemplating some kind of year-end donation, December is an especially good time to give, thanks to a few tax provisions that benefit donors this year.
For example, the charitable IRA rollover provision, set to expire Tuesday, enables people who are 70½ or older to transfer up to $100,000 from an individual retirement account to a public charity free from federal income tax. And those who fall into the new 39.6 percent income tax bracket can also deduct charitable donations at the 39.6 percent rate.
While these financial incentives for giving are certainly important, most of us give because we want to help others; the tax benefits are icing on the cake. We give because we want to repay a beloved alma mater for a life-changing education, or because we want to support the life-saving work of a charitable clinic, or because our communities are enriched by the enhancing programs of our art institutions. We give to make an investment.
Yet most of us give without much consideration for the best and most effective use of our investment. Recently I read a study by Hope Consulting that found that only 35 percent of donors do any research before giving to charitable organizations. What’s more, of that 35 percent, the vast majority do two hours of research or less.
That’s a shame, because the challenges facing Arkansas weren’t created quickly, and they won’t be solved quickly. It takes time to understand complex issues like poverty, low educational attainment and poor health. It takes time to get to know the organizations and individuals working to address these issues and to determine where your charitable dollars can make the most impact. It takes time, but it’s time worth spending.
This past October, Arkansas Community Foundation released the second edition of our Aspire Arkansas report, a resource for people who want to take a more thoughtful approach to giving. The report compiles county-by-county data on dozens of indicators of quality of life in Arkansas. It’s a tool you can use to examine the needs in your community (education, health, economic development, civic engagement, etc.) side-by-side to determine the areas that would benefit most from your charitable investment.
Assessing and prioritizing needs is just the first step. The second is to find out which organizations and individuals are making the most impact in addressing key needs. Assessing a charity’s data is one place to start. How do they measure success? What is measurably different in the community because of their work?
While numbers are important, there’s no substitute for making a personal connection. Talk to people who are passionate about your target issue to hear their opinions about what works. Visit or volunteer with organizations you’re considering supporting to see what their work looks like in action. And look beyond your usual suspects. Most of us have favorite charities to which we’re loyal, but there are likely other organizations targeting key issues your community that are worth adding to your giving portfolio.
As the year draws to a close, it’s not too late to make a high-impact charitable investment. Arkansas needs philanthropic leaders who give generously, but more importantly, give thoughtfully.
Heather Larkin is president and chief executive officer of Arkansas Community Foundation.
Perspective, Pages 73 on 12/29/2013