On this Veteran’s Day, we remember those who have served and are serving the nation still today.  Their lives are filled with challenge and sacrifice- some far too much.  But we are grateful, and proud of those who choose to serve in the military.

There are many charitable organizations that help military veterans and active duty service members.  Too often these organizations barely make ends meet, but they fulfill a critical role in supporting injured veterans and those trying to get a new start on life as civilians.

One of the best things we can do when considering a charitable donation to a veteran’s or public service organization is to make sure our contribution will be used effectively.  Charity Navigator is one of the best sites for exploring charities, and they rate non-profit organizations on the basis of how effectively they put donations to work, as compared to how much money is spent on actual charitable efforts rather than administrative expenses.

“Any charity that spends money inefficiently is doing a disservice to both its donors and its intended beneficiaries, but the fact that these charities are using the good name of America ’s heroes to raise donations and then end up spending most of these donations on fundraising or administration is especially sad. Donors become victims when their donations are not used to benefit their local police, firefighters or service men and women as they had thought. Police, firefighters, and veterans are doubly hurt both because they don’t receive the assistance they need, and because people who give to a poorly-run, inefficient charity once, may be hesitant to donate to a well-run police, firefighters, or veterans charity in the future.”

What else can we do to make sure our money will be used effectively?  Charity Navigator has three primary recommendations:

• Give locally. Don’t trust a charity based in another state that promises that it will give money to police, firefighters or veterans in your state. If you want to support your local or state police, fire station, or military unit contact them directly and find out where they prefer to have donations given.
• Never give over the phone. Of the charities with high fundraising expenses, much of their money is spent on for-profit telemarketing companies. These companies often charge the charity 20 to 90 cents of each dollar raised. That’s more of your money not going to those protecting you.
• Look at the charity’s finances for yourself. Ask to see a copy of the charity’s annual report or a brochure describing its mission, accomplishments and a current financial statement. You can also request a copy of the organization’s IRS form 990. Federal law requires nonprofit organizations to provide their last 3 IRS form 990s (tax returns) within 30 days of your request. Charity Navigator has detailed analysis of the financial records of many police, firefighters, and veterans groups on our site. The lists below show some of the best and worst police and firefighters, and veterans’ charities that we currently evaluate.

We can be thankful for all who serve.  Yet on this day, we remember our military veterans and those who serve far from home. 

One of the charitable trends in recent years is donating a car or other vehicle to a needy organization.  It helps them fulfill a need, and helps the donor with a nice tax deduction, right?  Well, maybe.   That’s because changes in the tax law over the past couple of years have made it less attractive to many people based on the charitable deduction they may get for tax purposes.

That doesn’t mean it’s not a great idea, or that charities could use the vehicle.  But there are some things to watch for if you are considering donating a car, boat, plane or other vehicle.   MSNBC has a nice overview of 10 Tips for How to Donate a Car to Charity.   This is great information, although it makes the process look somewhat cumbersome for the average person.  

1. Avoid Middlemen
2. Find a worthy charity.
3. Check the math.
4. Know the (tax/business) status of your recipient.
5. Do the delivery yourself.
6. Transfer the vehicle (title) with care.
7.  Your estimate of the vehicle value is probably wrong.
8.  Know when you can really report fair market value (FMV).
9.  Keep thorough paper records of the transaction.
10.  Pay attention to the details.

That’s a pretty good list of considerations, and the article discusses them fairly well. The Wall Street Journal also has some excellent advice, and Tom Herman from the Tax Report discusses how Car Donations have Taken a Hit in recent years because of the tax law changes, and some important considerations:

From the WSJ article: “If you do decide to donate your car, boat or plane, rather than selling it or trading it in, consider shopping around among charities. First, check to make sure the organization is legitimate. Then ask what it plans to do with your gift — and, if your vehicle, boat or plane is valuable enough, consider trying to find an organization that fits into one of the exceptions outlined above.”

“Choosing a charity is a very personal choice,” says Mr. Rosica of Ernst & Young. “For example, you may want to consider finding one that will use your car for its charitable purpose, such as delivering food or clothing to the needy.”

“Whatever the case, be sure to pay attention to the record-keeping and substantiation requirements. Also remember you’re eligible to deduct donations to charity only if you itemize your deductions on Schedule A of Form 1040, instead of claiming the standard deduction, the IRS said. And if you make a gift and get something significant in return from the charity, such as tickets to a sporting event, you can deduct only the amount that exceeds the value of what you received.”

Donating a vehicle can still be a very good idea, but it’s important to do a little legwork to make sure it works out the way you intended, especially regarding tax considerations.

There are many charities and organizations helping people that we often don’t think about.  I never realized for example how important a local food pantry can be to people.  Certainly in many larger metropolitan areas there are many church and other community organizations that have a food pantry to help people in need.

But I found out by chance that even in our local, semi-rural area there are people that benefit from a food pantry.  We participate in Cub Scouts for our son, and our meeting place is provided by a community church.  When we participated in the annual food drive, I was amazed to find out that this church provided the only food pantry for the surrounding 10 mile region.  And they never had enough food to help all the people in need.  The scouts conducted the annual food drive and gathered donations for about 4-6  months of the year.  And we try to help by bringing canned goods for the food pantry when we hold scout den meetings a couple of times each month.

I started to wonder how people even find out about a food pantry in their local area, and wouldn’t you know it- there’s a website for that!?   America’s Second Harvest calls themselves The Nation’s Food Bank Network, and host their online presence at SecondHarvest.org.  The link above will take you to their site and the zip code lookup page to find a food bank in your local area.

The site doesn’t list all the food banks that may exist, but it’s a nice place to start.  And I’m glad to see there are so many dedicated organizations for helping people with essential needs.  There are few things more important than food on the table- and poverty is an endemic problem that we are still challenged to solve.

If you do find out about a local food pantry where you live, why not stop by and make a donation?  Better yet, involve your family or friends, or maybe someone you know with kids in cub scouts.  It’s a wonderful example, and does so much good.  Last Thanksgiving we were able to put together two complete meal and Christmas present packages for two families in need.  They were going through some challenging times, and were so thankful.  The young boys and girls who helped collect the food were very proud and learned that helping others can make an enormous difference.

Look what I found today! Tom Hanks is helping lead a wonderful charity auction for the Freeplay Foundation by selling Freeplay radios on eBay. The Freeplay foundation itself is a fantastic charity organization dedicated to helping people around the world gain access to information and education through sustainable technologies. This charity auction is a wonderful cause to sell these special solar and mechanical powered radios… well, how instead of me writing, how about listening to Tom Hanks describe it!

Here’s a link to the auction listings that are running from January 22nd to February 1st:

A busy April and now May already!  What is it about Spring that seems to foster doing more things… and having more to do!?  I’m a little late writing about it- but like many television viewers, I watched the American Idol charity drive called Idol Gives Back the other week.  I thought Celine Dion and Elvis were incredible!  Apple’s iTunes is even giving proceeds from Idol Gives Back content to the charity through May 23rd.   As of last week, the AP was reporting that Idol Gives Back had raised over $60 million dollars!  You can find a donation form on this page if you are interested!

I’ve become a fan of Donor Advised Funds if chosen wisely.  There are many types- and specific giving programs for individual charities.  I prefer using a large charitable fund as a donor advised fund such as the Fidelity Charitable Gift Fund.  The downside to these programs however are the requirement for a large contribution to open the fund, usually in the range of $5000 to $10,000.  But once opened, the donor can choose a variety of qualified charities to recommend and make donations in small amounts, e.g. $100 or more.  The positive benefit of using this approach is the fund invests the money for the donor over time, so there is the potential for increased growth of the original gift.  There may also be a charitable tax deduction in the year of the original gift to the fund.  Donor advised funds are much simpler to use than establishing your own foundation, but they may be out of reach for many potential donors simply due to initial funding requirements.  I’m working on gathering links and information to useful sites about charity, giving programs, etc.  I’ll use the search engines and firsthand knowledge to begin, but if you have any recommendations please let me know!