Dig into holiday spirit to help on-the-ground organizations

By Andrew Zashin

Year-end giving is a philanthropic tradition that holds special significance as the calendar draws to a close. As the final months of the year unfold, individuals, corporations and foundations often reflect on their achievements, growth and the impact they can make on the world. This introspection often culminates in a surge of generosity and charitable donations, collectively known as year-end giving.

Aside from altruistic reasons for giving, there are also other more practical considerations as well.

One of the primary reasons for the increase in charitable contributions toward the end of the year is the holiday season, and with it, the holiday spirit. Tax planning is another great motivator for year-end giving. Specific advantages vary depending on a particular individual’s circumstances, but charitable giving can create a win-win for both the giver and recipient. Some individuals may also benefit from giving for estate planning objectives. Whatever the reasons, giving might create opportunities for the giver.

The festive season, marked by holidays like Thanksgiving, Chanukah and Christmas, fosters a sense of compassion and goodwill. Many people are inspired to share their blessings with those who are less fortunate, making it a time when charitable organizations experience heightened support. The act of giving during the year-end becomes a way for individuals to spread joy, hope, and make a positive difference in the lives of others. Now, especially, during this time of crisis and conflict, it is more imperative than ever for individuals and entities to tap into this holiday spirit and support those in need.

Donations to on-the-ground organizations in Israel and Gaza play a vital role in providing immediate relief and assistance to those innocent victims affected by the conflict. These organizations depend on financial contributions to deliver essential services, medical assistance and humanitarian assistance.

By donating to these organizations, you can give children, families and soldiers hope in the face of uncertainty regarding their loved ones, livelihood and safety. Your donations enable organizations to respond swiftly and effectively to the urgent needs of these communities, providing a lifeline to individuals who may be struggling to meet their basic needs.

Consider the following organizations when making donations this holiday season:

  • Magen David Adom: A donation to MDA, Israel’s national emergency service, helps purchase equipment for the rescue teams on the front lines and on the battlefields, directly in the face of danger. Donations are used to purchase ambulances, medical equipment, protective equipment, bandages and other equipment that helps save lives.
  • Israel Emergency Aid: Israel Emergency Aid is an Israeli organization committed to ensuring that every fighter has the necessary combat and defense gear they need to triumph over terrorism.
  • Friends of the Israel Defense Forces: Friends of the IDF is an organization authorized to provide for the welfare of soldiers in the IDF.
  • Jewish Federation of Cleveland: The Federation has launched its Israel Emergency Campaign to help provide immediate assistance to victims of Hamas’ terrorism and their families.

This article originally appeared as a column for the Cleveland Jewish News.

Charitable contributions in divorce: not just for rich and famous

By Andrew Zashin*

Navigating the divorce process is often both emotionally and financially challenging. As part of the process, couples must divide their assets. While this often involves extensive legal and financial negotiations, and potentially even court involvement, there exists one option in structuring a property division that can yield positive results that benefit both the parties and their communities: charitable contributions.

The media often portrays charitable contributions made in connection with a divorce as an avenue only available to the rich and famous. I previously discussed how, as part of their 2021 divorce settlement, Bill and Melinda Gates pledged to continue working together on their philanthropic foundation, the Bill and Melinda Gates Foundation, which focuses on global health and development. The Gateses, who have donated more than $59.1 billion to their foundation since its creation, stated that they would continue to work together “to shape and approve foundation strategies, advocate for the foundation’s issues, and set the organization’s overall direction.”

Similarly, following her divorce from Amazon founder Jeff Bezos in 2019, MacKenzie Scott has made headlines for her philanthropic giving, donating more than $14 billion to over 1,600 charities and organizations. She works with a team of advisers to identify and vet community-focused organizations that work to reduce disparities in health, education, economic outcomes, and other critical issues.

But incorporating charitable contributions into a divorce settlement is not just for the rich and famous. In fact, charitable giving serves as a viable option for divorcing couples of all income levels. As charitable giving can take many forms, including donations of money or assets, one or both parties may choose to donate a portion of their property division to a charitable organization as part of their divorce settlement. This provides the parties with a way to support causes that are important to them, while potentially receiving tax benefits that can help offset some of the financial costs of the divorce.

There exist several types of vehicles that can help facilitate these charitable contributions. I have previously discussed the tax “win-win” associated with donor advised funds – accounts that parties can use to deposit assets for charitable donations over time. Divorcing couples who cannot agree on how to divide an asset may consider donating that asset directly or putting that asset into a donor advised funds.

Parties may further agree that one or both parties will contribute a certain number of dollars to a donor advised fund annually. Similarly, charitable remainder trusts are another vehicle available to divorcing couples. If a party plans to donate assets to charity, he or she could establish an irrevocable charitable remainder trusts that provides the income generated from the trust’s assets to their former spouse for a set period of time, after which the trust assets transfer to the designated charity. The spouse who donates the assets to the CRT may also enjoy the tax benefits associated with the charitable donation.

Overall, divorcing couples should consider incorporating charitable contributions into their final agreement. By working with qualified financial advisors and family law attorneys, divorcing couples can explore the best ways to incorporate charitable giving into their property division and create a positive legacy that will endure beyond their marriage.

This article originally appeared as a column for the Cleveland Jewish News.

Consider charitable contribution to honor man’s best friend

By Andrew Zashin*

Andrew Zashin and his best friend, Hugo

Man’s best friend. A part of the family. Every day, dogs demonstrate their love and loyalty to their owners, which has inspired owners to leave some – or even all – of their estates to their beloved companions to ensure that these animals are well cared for after the owner’s death.

This may sound ridiculous, but it is not. More and more estate planning attorneys are incorporating provisions for prized pups into wills and trusts, and are requiring owners to consider things like what assets owners wish to leave for the pet’s care and well-being; who will care for the pet; and, what happens to any remaining assets set aside for the pet’s care after the animal’s death. Family lawyers are routinely asked to fight dog custody cases and even put together “pet parenting plans.” Some states even have statutes dealing specifically with pet custody! Pet issues, therefore, are real and can be complicated.

The most famous example of a pet-focused estate plan belongs to Leona Helmsley, a billionaire real estate mogul and hotelier who left a $12 million trust fund for her beloved dog, a Maltese named Trouble, while leaving nothing to two of her grandchildren. A court found that this $12 million inheritance exceeded the amount required to care for Trouble during her expected lifetime and ultimately reduced the trust to $2 million. In her estate planning, Helmsley entrusted her brother with Trouble’s care, but when he decided that he did not want to care for Trouble, one of Helmsley’s longtime staff members stepped up and cared for the pooch. When Trouble died in 2010, the remainder of the money set aside for her care reverted to the Leona M. and Harry B. Helmsley Charitable Trust, which Helmsley intended to provide for the “care and welfare of dogs.” The Helmsley Charitable Trust’s mission has since shifted to non-animal related causes.

Other notable examples of pet-prioritized estates include that of Gail Posner, who left her $8.4 million Miami Beach mansion and a $3 million trust to her three pups, and fashion icon Karl Lagerfeld, who similarly left a portion of his estimated $300 million net worth to his Birman cat, Choupette. While it is unclear what Posner and Lagerfeld intended for the remainder of the assets left to their respective pets after the death of each animal, this is an important question for pet owners to consider.

If an owner does not name a person or an entity to receive the remainder of the assets left for the care of a pet, the assets may revert to the owner’s estate after the pet’s death. This leads some owners to name a specific individual, like the person who provided care for the pet after the owner’s death, to receive the remainder of the assets. Others, like Helmsley, choose to honor the memory of their cherished family members and direct that any remaining assets from those set aside for the care and well-being of their pets be donated to a pet-focused charitable organization.

There are many charitable organizations committed to helping rescue and improve the lives of dogs and other animals, both locally and nationwide. I encourage you to consider contributing to pet-focused organizations like the Cleveland Animal Protective League, the Sanctuary for Senior Dogs, and the American Society for the Prevention of Cruelty to Animals, as well as to consider incorporating your pets and organizations like these into your estate planning. Man’s best friend will thank you for thinking of them.

This article originally appeared as a column for the Cleveland Jewish News.

Donating from your digital wallet

By Andrew Zashin*

We are only days away from the new year which means I’m here to remind you once again about charitable giving and its potential associated financial benefits. It was just over one year ago that I discussed the benefits of donating appreciated stocks to charities. Recently, I discovered that similar to stocks, you can donate cryptocurrency to charity.

The benefit of donating cryptocurrency is like the benefit you receive if you donate stock directly to a charity: the avoidance of paying capital gains tax.

In other words, by donating cryptocurrency directly to a charity you can avoid paying capital gains taxes on the cryptocurrency while claiming the full amount donated as a charitable deduction on your taxes. If you don’t recall from my prior column, capital gains is the difference between the purchase price of a stock or cryptocurrency and the selling price. The amount of capital gain taxes you pay is dependent on two things: the length of time you’ve owned the cryptocurrency and your total annual income.

However, if you donate cryptocurrency directly to the charity, instead of selling it first, you can avoid paying capital gains taxes on the donation, just like donations of appreciated securities.

In addition to avoiding capital gains taxes through donation, you may also have the ability to claim a charitable deduction. To do so, you must have held the cryptocurrency for at least a year and you must itemize your deductions. Donations worth more than $5,000 must get a qualified appraisal. The charitable deduction is limited to 30% of income, but excess deductions may be carried forward for up to five years. Donations of cryptocurrency are not eligible for the above-the-line charitable deduction, since the above-the-line deduction is limited to cash donations.

Donating cryptocurrency can, however, be a little more complicated than donating securities since the vast majority of charities do not have a digital wallet, and therefore do not have the ability to accept direct donations. However, entities such as Crypto for Charity, Schwab Charitable and Fidelity Charitable are attempting to make the cryptocurrency donation process easier.

How does it work?

Per the Crypto for Charity website, your cryptocurrency donation is first funneled through Crypto for Charity’s affiliated 501(c)(3) tax-exempt charity. From there, the donation is converted to dollars with the net proceeds being distributed to the qualifying charity of your choosing.

If you’re interested in donating cryptocurrency this year or in the future, make sure you research the organization prior to your commitment. Further, given the tax ramifications associated with cryptocurrency donation, it is best to discuss your potential donation with an accountant prior to moving forward.

This article originally appeared as a column for the Cleveland Jewish News.

2023-11-10T13:38:04-05:00December 23rd, 2022|Charitable Donations, Cryptocurrency, Tax Planning|

One of most giving times of year upon us

By Andrew Zashin*

While Giving Tuesday has come and gone, it is still a wonderful time of year to give to charity. There are several ways to contribute this year and a handful of tax provisions that you should be aware of before you do.

As a result of the most recent stimulus package, the Consolidated Appropriations Act, 2021 and handful of significant provisions in the 2020 CARES Act related to charitable contributions were extended through 2021.

One of these noteworthy extensions is the “above-the-line” deduction for charitable contributions.

If you elect to take the standard deduction this year, you can once again deduct up to $300 ($600 for a married couple) from your adjusted gross income if you make a qualified cash contribution to a public charity. By lowering your adjusted gross income, you reduce your taxable income and thereby reduce your federal tax obligation.

If you itemize your deductions, you are once again permitted to deduct financial donations up to 100% of your 2021 adjusted gross income. Accordingly, a taxpayer who itemizes deductions could conceivably donate 100% of their adjusted gross income to public charity and thus owe zero income tax for the year 2021.

Filers who itemize their deductions may also want to consider giving appreciated securities to charity instead of cash this year.

Given the stock market’s solid run, the majority of securities have appreciated over the past 10 years. If you were to sell these appreciated stocks, they would be subject to capital gains taxes. The amount you owe in capital gain taxes depends on whether you’ve owned the shares for more than one year or less than one year and also on your total annual income.

However, if you donate the stock directly to a charity, you can avoid paying capital gain taxes assuming it’s a tax-exempt nonprofit. In other words, the donation allows you to avoid paying taxes on the increased value of the stock and thus reduce your taxable income. As an added bonus, the charity also avoids taxes when they sell the donated investment.

The tax-deduction limit for gifting stock to a public charity is up to 30% of your adjusted gross income, though you can carry any excess over for up to five years.

To donate stock to charity, you’ll first want to find whether the receiving charity has a brokerage account that can accept gifted stock. To obtain this information, contact the charity directly or visit the charity’s website.

People over the age of 70½ have another tool to use when it comes to charitable donations of up to $100,000 per year.

The Tax Act of 2017 made qualified charitable distributions permanent. These distributions do not need to be reported on the taxpayer’s Form 1040. But the money must go directly from the person’s IRA to the charity. This means that the tax payer cannot transfer the distribution to their bank account and subsequently donate cash to the charity.

Most importantly, before you make any financial contribution to a charity this year, make sure you research the organization prior to your commitment. Happy giving.

This article originally appeared as a column for the Cleveland Jewish News.

2023-11-10T13:38:06-05:00December 16th, 2021|Charitable Donations, Deductions, Planned Giving|

Charitable deductions listed for 2020

By Andrew Zashin*

When Congress passed the Coronavirus Aid, Relief and Economic Security Act in late March, media attention focused primarily upon newly-created stimulus funds and expanded unemployment benefits. As a result, the CARES Act also temporarily expanded the tax benefits associated with charitable contributions for the individual taxpayer.

Traditionally, taxpayers fell into one of two categories with respect to the financial implications of making charitable contributions: those who elected to use a standard deduction and those who itemized their deductions. In years past, the standard deduction taxpayer did not receive a tax benefit for contributing to a public nonprofit or charitable organization.

In other words, while the standard deduction taxpayer contributed to a meaningful public organization of their choosing, said donation provided no financial benefit to the taxpayer because the donation did not reduce the tax-payer’s adjusted gross income. Conversely, taxpayers who itemized their deductions were able to make deductions for charitable cash donations but only up to 60% of their AGI.

So what has the CARES Act done with respect to charitable contributions? Standard deduction taxpayers may now deduct up to $300 per taxpayer ($600 for a married couple) from their AGI if they make a qualified cash contribution to a public charity during 2020. By the taxpayer lowering their AGI, the taxpayer reduces their taxable income and thereby reduces their federal tax obligation. The benefit increases for taxpayers who itemize their deductions. Itemized deduction taxpayers are permitted to deduct donations up to 100% of their 2020 AGI. Accordingly, a taxpayer who itemizes deductions could conceivably donate 100% of their AGI to public charity and thus owe zero income tax for the year 2020.

It is important to note that restrictions do apply and should be carefully considered before donating. First, contributions of non-cash property do not qualify under the CARES Act. Further, the contribution in question must be made to a public charity. Public charities include foundations organized or created in the United States and operated exclusively for charitable, religious, educational, scientific or literary purposes.

What is not included? For the most part, donating to family foundations, corporate foundations and private non-operating foundations will not provide taxpayer with a qualifying charitable deduction under the CARES Act. If you are unsure whether the charity you wish to donate to is a public charity, you can easily check by accessing the Internal Revenue Service’s charities and nonprofit page by visiting bit.ly/33Fqtdc.

Resources such as the aforementioned website should be carefully utilized and consulted when making a decision regarding charitable contributions. For example, illegal and fraudulent charities do exist and have been created simply to scam well-intentioned donors. A common scheme includes the creation of an organization with an intentionally similar name as a legitimate charity in an effort to fool unsuspecting donors to contribute to them. For example, while Black Lives Matter is a legitimate public charity, the Black Lives Matter Foundation is not a public charity.

While the notion of charity in itself is an excellent reason to donate to the cause of your choice, the tax benefits provided under the CARES Act provide additional incentive to individuals. If you plan on making a financial donation and wish to maximize the tax benefits afforded under the CARES act, make sure you do so wisely by researching the organization prior to your commitment.

This article originally appeared as a column for the Cleveland Jewish News.

2023-11-10T13:38:08-05:00September 23rd, 2020|CARES Act, Charitable Donations, Deductions|

Donor-advised funds provide tax win-win

By Andrew Zashin*

Hundreds of billions of dollars have accumulated in donor-advised funds since this vehicle was created all the way back in the 1930s. In fact, an estimated $110 billion is sitting in these funds right now. All, or at least virtually all, of the biggest investment firms in the country now offer this type of philanthropic product to investors, and these funds have proven to be quite lucrative to firms given the volume of cash flowing into them.

What is a donor advised fund?

It is an alternative method of giving that provides tax benefits beyond simple direct giving, at far less cost and administration headache than the creation of a foundation.

While a small subset of donors may find that the creation of a foundation, or even a specific charitable organization, best suits their philanthropic goals, these things require a good amount of administrative oversight and cost. They are simply out of reach – or make little sense – for most donors.

Direct giving – that is, making the donation directly to the charitable organization – may make sense in the majority of cases. After all, it is relatively simple to write a check to a specified organization. Then the donor can simply keep track of donations and then itemize these donations as deductions at the end of the tax year.

But if you are going to have an unusually high-adjusted gross income in a specific tax year – maybe because you exercised some stock options or got a big cash payout –you might consider contributing to a donor advised fund in order to increase your tax deduction and offset the higher tax burden for that year. Or, you might opt to donate appreciated securities or other assets, at fair market value rather than the original cost basis, avoiding capital gains.

Once the money is invested in a donor advised fund, it grows tax-free and then is paid out tax-free to charitable causes. It sounds like a win-win. The donor gets additional tax benefits with minimal administrative headaches, and the charitable organizations get more money because the tax-free growth means there is simply more to give.

The reverse side of the coin is that you are giving up control of the money by placing it in a donor-advised fund. As the name implies, the “donor” is merely an “advisor” as to how and when funds should be allocated. Although, as a practical matter, account managers are unlikely to attract new dollars and investors by entirely disregarding the “advice” given by account holders.

Interestingly, this type of fund has recently come under some fire because of the suggestion that wealthy would-be donors are taking advantage of the tax benefits but then never actually directing funds to be paid out to charitable organizations. The assertion is that billions of dollars are simply sitting there, hopefully growing, but doing nothing to benefit any actual cause.

Hard data simply to support or refute this simply does not exist. However, earlier this year, the California legislature introduced a bill that is intended to provide more oversight into these accounts in order to determine if the “spirit” of these accounts is being routinely violated. It is unclear at this point if such legislation will pass, what new oversight might show, and if any strengthened oversight requirements will be ultimately adopted by other states or at the federal level.

This article originally appeared as a column for the Cleveland Jewish News.

2023-11-10T13:38:10-05:00February 21st, 2020|Charitable Donations, Tax Breaks, Tax Planning|

Donor-advised funds popular with tax reform

By Andrew Zashin*

The donor-advised fund is becoming a more popular vehicle for charitable giving under the recent tax law reforms.

Among many changes, the new tax laws increase the standard deduction for both individuals and married couples, making it more beneficial for many taxpayers to simply take the standard deduction instead of itemizing and capitalizing on things like state and local taxes, student loan interest and mortgage interest.

Since many taxpayers will no longer benefit from itemizing deductions, this has become a way to retain the benefit of charitable donations that previously would have been itemized. This vehicle may also be a beneficial planning tool for donors who have experienced a particularly high income year.

With an initial contribution of at least $5,000, anyone can open up a fund that can then be professionally managed and invested. Once created, the donor can use the fund’s assets to contribute to his or her favorite charity, at any time.

Using this vehicle, a taxpayer could potentially fund a few years’ worth of giving in one tax year. The idea is, then, to contribute enough to make itemization more beneficial in the contribution year, even if the standard deduction is more beneficial in other years. Then, rather than giving the entire contribution amount to the charity in the contribution year, the donor can opt to spread the contribution out over several years, allowing the remaining balance to grow between donations.

As a simple example, say an individual typically donates $4,000 annually to charitable causes. This donor could pre-fund five years of giving, or $20,000, into a donor-advised fund. He or she can then direct annual contributions at the same level, while contributing enough in a single tax year to make itemization worthwhile, thus deriving a greater tax benefit than the standard deduction every fifth year.

In addition, appreciated non-liquid assets, such as securities, can be contributed. As such, many opt to use a donor-advised fund as a mechanism to reduce or eliminate capital gains tax, lower total income tax liability, and, ultimately, to provide a larger donation to the cause of choice.

Donor-advised funds may also be used as part of an overall estate plan.

Of course, the desirability of this type of fund will depend on several factors. A donor-advised fund may have significantly lower overhead than, say, a private foundation. However, a foundation or dedicated non-profit organization may have greater longevity. While a foundation or organization could last for generations, some organizations that sponsor donor advised funds may have limits as to how long that donor-advised fund can exist. And, while other giving mechanisms may afford greater control over the use of funds, a donor-advised fund theoretically only takes advice from the donor about the use of the monies, rather than being mandated to use those funds in a particular way (although it would be unusual for a sponsoring organization to use the funds against the donor’s direction.)

Ultimately, if you think that this type of vehicle may be right for you, you will want to speak with a financial professional to determine what is best for your situation.

This article originally appeared as a column for the Cleveland Jewish News.

2023-11-10T13:38:10-05:00February 14th, 2019|Charitable Donations, Tax Planning|

Plan giving to maximize benefits to you, your favorite charities

By Andrew Zashin*

Whether you have $1,000 to give or $1 million, your estate plan may include some type of planned giving to your favorite charitable organization.

Planned giving at its most basic, simply means a donation that is made with consideration of the benefit to the recipient and to the donor (e.g. tax benefits) and possibly to future heirs as well. Often, but not always, the charitable organization will receive the benefit at some future point after the passing of the donor.

Planned giving generally allows for greater contributions than the donor could otherwise afford during his or her lifetime. For larger gifts, planned giving may provide lifetime income to the donor and can make the most of the gift while minimizing the impact on the donor’s estate.

Planned giving can be as simple as providing – most often in a will – for a specific item or gift to go to a specified organization. In that way, the executor of your estate will be able to enact your wishes by seeing that the funds or item (a piece of artwork or a vehicle, for example) is transferred appropriately as part of the settlement of your estate.

While real property could be conferred this way. too, Ohio has an additional option in the Transfer on Death Designation Affidavit. Previously, taking the form of a “transfer-on-death deed,” this document can be properly filed and recorded during the life of the donor and will allow the property to change hands by presenting evidence of the donor’s death to the county recorder, outside of and irrespective of any probate matter that is opened.

If your gift will be larger, you may benefit from a charitable gift annuity. These types of gifts may take several different forms. But, generally, these options will allow the donor to make an immediate donation that can provide a tax deduction. The organization then will invest the funds and pay an annualized benefit to the donor for his or her life. Once the donor passes, the remainder will go to the organization. Sometimes, funds will be pooled with those from other donors.

Charitable trusts are another way to give. Several options are available, depending on whether you would like to have the donation provide you with an income stream during your life, or whether you would like to provide an ongoing income stream for the organization with the residual to ultimately go to your heirs at some future point.

The bottom line is that planned giving is a terrific way to benefit your favorite causes and many options are open to you no matter how much you have to give. All it takes is, well, a little planning. And if you find yourself in need of some professional assistance, some larger charitable organizations can help with this directly, or a good financial planner can surely assist.

This article originally appeared as a column for the Cleveland Jewish News.

2023-11-10T13:38:11-05:00September 20th, 2018|Charitable Donations, Estate Planning|

Crowdfunding – new way to fund raise for charitable causes

By Andrew Zashin*

Crowdfunding, at its simplest, is the funding of some cause or venture via a large number of small contributions. That is, the concept is to raise money by calling upon a large number of people to each make a small contribution.

Clearly, this is not a new concept. After all, the humble idea of “taking up a collection” for something has been around for millennia. But the internet and social media have revolutionized the concept and given it a catchy name.

The concept is being used to fund the development of new products and ventures (think Kickstarter or Indigogo). But it is also being put to use in the area of charitable giving. Websites like GoFundMe, which is arguably the most successful and best known (to such extent that the phrase “I/he/she/they started a GoFundMe” has entered the common vernacular), allow anyone with an internet connection to set up a fundraiser for any cause of their choosing.

Most typically, such a crowdfund request will point to a specific individual or group of individuals, for example, a classroom looking for supplies, a family whose primary breadwinner has been diagnosed with a terminal illness, or the victims of an unexpected disaster. Requests run the gamut, with some seeking only a few hundred dollars and some raking in multiple millions of dollars.

For recipients, this type of fundraising is quick, easy, and often quite effective. The organizer of the fundraiser need only create a page on the crowdfunding site, and share the link with family and friends via social media. If the cause is compelling, ideally it will then be passed on to more and more potential donors, and hopefully attract a large response.

Typically, the hosting site will charge a flat fee per transaction, or take a small percentage of what is donated. The page creator can set up some rules as to who can access the funds. And, so long as the donations do not involve the sale of goods and services, they typically will not be taxable.

For the donor, though, no matter how “charitable” the cause, the contribution will probably not qualify as a tax-deductible charitable donation; donations are usually only deductible when made to qualified organizations that are intended to benefit a broader swath of the population, rather than the typical crowdfunding campaign that is intended to benefit one or a few named individuals. Further, it may be subject to gift tax rules if it exceeds the annual limit ($15,000 for the 2018 tax year).

“Philanthropy” and “charity” are not quite synonymous, and the rise of charitable crowdfunding makes some traditional philanthropic organizations uneasy. Crowdfunded campaigns are generally started in order to address an immediate concern. They neither have, nor require, a longer term vision.

For example, say a homeless person finds a bag full of cash deposits that a small business owner dropped on the way to the bank. Instead of keeping the money, he works to find the rightful owner and returns it. The business owner, grateful for the return of the cash, is compelled to repay this good deed by setting up a crowdfunding campaign for the benefit of the good Samaritan. This is great news for that individual.

But it does absolutely nothing to help the wider systemic problem of homelessness in the city. A concern is that while this one-off type of fundraising “feels good” and is very popular with the individual donor, it allocates donations in a way that accomplishes less overall good than could be accomplished with the type of longer term, sustainable plan that a philanthropic organization or other established charitable organization is likely to have.

But, ultimately, crowdfunding appears to be here to stay. The platforms for giving are changing as fast as technology advances. And, the options available to potential donors are much wider than ever before. And, ultimately, it is difficult to characterize more choice in charitable giving as anything other than a good thing.

This article originally appeared as a column for the Cleveland Jewish News.

2023-11-10T13:38:11-05:00May 15th, 2018|Charitable Donations, Crowdfunding, Fundraising|
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