Thanks to mobile apps, donating via text message and fundraising websites, charities are more accessible than ever. These new forms of giving, coupled with a steady economic recovery, are energizing philanthropy among Americans.
Giving to nonprofits in the United States rose 6.7 percent in 2012, an increase of about $23 billion over 2011, according to the Atlas of Giving, an organization that measures charitable giving in the U.S. Most charities, however, remain largely dependent on older Americans for monetary support, says Patrick Rooney, associate dean for academic affairs and research at Indiana University Lilly Family School of Philanthropy.
"No one's going to give you a $1 million donation over their phone's [mobile] app," Rooney says. "Charities have to appeal to the next generation through technology, but that has to be only one part of a comprehensive program so that they're not missing major donors. They need to still be having those one-on-one conversations that major donors expect."
Nonetheless, disaster relief organizations have tapped a broad market by enabling people to send a text message to make a nominal donation. Following Hurricane Sandy, Verizon customers could make a $10 donation by texting REDCROSS to a designated number. Those who wanted to give more could donate up to $50 via text message. Rooney says such disaster relief efforts help more Americans make conscious decisions about how they're choosing to donate money.
However, Rooney says people are often unsure where to give their money. When considering an organization to support, prospective donors can use resources like GuideStar.org, which compiles information on every Internal Revenue Service-registered nonprofit organization, including information on the charity's mission, impact, programs and transparency. CharityNavigator.org, which evaluates more than 6,000 charities nationwide, is also a good source for information.
Only donations to 501(c)(3)s – defined as American tax-exempt nonprofit organizations – can be used to qualify for a tax deduction. Check and cash contributions to charities are generally fully deductible up to 50 percent of the donor's adjusted gross income.
Still, determining how much to donate can be tricky. Jason Franklin, an assistant professor of public service at New York University and executive director of Bolder Giving, a nonprofit focused on helping Americans give more effectively, encourages individuals to commit donating a percentage of their income to charity. "I tell people to pick a percentage, even if it's just 1 percent," says Franklin, adding that he believes donors tend to give rounded contributions like $100 without considering how far the money will go. "The reason I think a percentage is a great place to start is that as your income increases, you build in the expectation to grow your giving at the same pace," he says.
To maximize your charitable giving, consider these innovative ways to donate:
Tab for a Cause. Attention multitaskers: Each time you open a tab in your Internet browser, you have an opportunity to raise money for charity. Install this extension (available for Google Chrome and Firefox users), and for each new tab you open, the nonprofit's sponsors will donate a fraction of a penny to charity. The website states what organizations it supports, including Water.org, a U.S.-based nonprofit that provides safe drinking water and sanitation to people in developing countries. (TabForACause.org)
Browse for a Cause. This Firefox plug-in offers an easy way to give to charity while shopping online. The organization's online retail partners, like Amazon, pay a percentage of profits through an affiliate program of sales partners. When you buy items using the plug-in, the organization donates about 3 to 5 percent of the purchase price to the charity of your choice. (BrowseForACause.com)