stuffing coins into sleeves

As a journalist covering the field of philanthropy, I've learned over and over that being a philanthropist and trying to effect change is never about how much money you have or the amount you donate. It's only about the decision to give.

So this year, I figured it was time to put my money where my mouth is. My friend and I set up a modest, donor-advised fund that is hosted by a community foundation. Soon, we'll be making grants to needy groups in the region.

Join the club of problem solvers

This was a great gift to myself. Just like that, I felt terrific -- the way all the philanthropists I've met and interviewed say they do, whether they are heirs to a family fortune or people who can barely scrape together $500. Of course, setting up the fund put me in tune with the holiday season. But it also carried me over a threshold. Now, I've joined the ranks of people who look for solutions instead of just cataloguing problems. It's definitely empowering.

I invite you to join that club as well. All you need is one of the three T's: time, talent, or treasure. Giving any one of those can make a world of difference. And you needn't give huge amounts. To establish a donor-advised charitable fund, most community foundations have just a $2,500 minimum.

You might also consider launching a giving circle -- a group that casually gets together to help the local community.

Giving is now more attractive - but with stricter rules

If feeling good is not incentive enough, how about the prospect of a new financial advantage? In August 2006, Congress passed The Pension Protection Act of 2006, a law intended to encourage more charitable giving, ease some rules, and avoid abuses such as those perpetrated by political lobbyist Jack Abramoff, who was recently convicted of defrauding Native American tribes.

If you are considering making year-end charitable gifts, as many taxpayers do, it pays to research the new options and ask for advice from your accountant, tax attorney or money manager. Get clarity about what the IRS will and won't allow you to deduct and start hanging on to every receipt you can. As of January 1, you must be able to show either a bank record or receipt for every monetary contribution you claim as a tax deduction. That includes the dollars you throw into Santa's bucket at the mall or the collection plate on Sundays.

Here are some highlights of the new law's provisions.

  • IRA distributions. In 2006 and 2007, taxpayers ages 70 1/2 and older can make tax-free gifts of up to $100,000 per year from their individual retirement accounts (IRAs) or from Roth IRAs. If you choose an eligible charity, you can make the gift directly from your IRA account without incurring any income tax for the distribution. You don't even need to itemize your return to take advantage of this provision (if you do itemize, you cannot also deduct the same contribution).

  • Gifts of clothing or household items. After August 17, 2006, any used clothing or household items you donate must be considered to be in "good" or even better condition to qualify for a tax deduction. For donations valued at more than $500, you must include a documented appraisal with your return.

  • Gifts of art and collectibles. New rules now apply when you donate what's called "fractional gifts" -- shares of an artwork, antique, collectible, or any other valuable item. Check with a tax advisor before making such a move.

  • Real estate and conservation. The law also mandates changes for rehabilitation tax credits, contributions of property and more. Again, consult a tax advisor if you want to make a contribution in this category.

  • Volunteer work. You may also rate a tax deduction for donating your time. If this interests you, remember that you must complete your volunteer work before midnight on December 31, 2006 to qualify.

10 holiday gifts to put sparkle in the season

If you're eager to get started, here are 10 fast-track ideas for charitable giving that require little effort. As you read these, you'll probably think of a dozen more.

  1. Work alongside your teenager in a community service project. Call the local community center or YMCA to ask where best to put your efforts.
  2. Give a blanket, food or clothing to the homeless person you see every morning.
  3. Volunteer to help clean up a local park or playground.
  4. Offer to baby-sit for neighbors who can't afford a night out very often.
  5. Shop for groceries or run errands for a neighborhood shut-in or senior.
  6. Volunteer to help with reading or other mentoring programs. Call the local school or community college to find out how.
  7. Donate a talent or skill -- whether bookkeeping or graphic design -- to an organization that works for a cause you believe in.
  8. Spend a day working at the local ASPCA or animal shelter.
  9. Give your frequent flier miles or club points to a charity or to the Make a Wish Foundation.
  10. Buy equipment for and/or offer to coach the local soccer or little league team.


Remember: Donating money, becoming engaged in philanthropy, volunteering your time or extending an act of kindness needn't require a huge investment or elaborate planning. Just decide to get involved and jump in.

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