During the economic downturn of the past few years, charitable donations have decreased dramatically across the nonprofit sector, with some leaders predicting it will it take charities six years to return to where they were financially in 2007. Further reductions in these donations will reduce nonprofits’ ability to serve the individuals and families who rely on them for job training and other critical community-based services.
With one month remaining in the 2011 tax year, Goodwill® is empowering donors like you to make informed decisions about where you donate, and urging Congress to protect charitable giving incentives that ensure you continue to receive a deduction for your contributions.
Know Your Donation Bin
A proliferation of donation bins in convenient locations can make it difficult for donors like you to discern which charities are legitimate and which are actually for-profit entities or fraudulent charities trying to dupe them.
There are currently 21 states and a handful of counties and municipalities with ordinances pertaining to unattended donation bins – those drop boxes that you often see in parking lots. The most common component of those laws is a disclosure label which is required to be placed on the bin noting the mission of the organization, contact information for the organization, and whether the organization is for-profit, a nonprofit, or a for-profit company collecting donations on behalf of another agency.
It is up to you the donor to be educated about the organizations to which you give. You can check to see if the organization is a registered charity in the state by confirming with the state attorney general or secretary of state’s office. Additional information such as how much of their revenue goes to overhead and administrative costs can be found with a charity-rating agency such as Charity Navigator or GuideStar, or online resources such as GreatNonprofits or Philanthropedia.
Charitable Deductions Drive Mission Services at Goodwill
Receiving a tax deduction in return for donating is a powerful incentive for Goodwill’s 74 million donors. The majority of Goodwill’s revenue is generated by selling these donors’ contributions of clothes and household items at Goodwill retail stores and online. Eighty-four percent of collective revenues raised go directly toward supporting and growing critical community-based job-training programs and services.
Ensuring donors continue to receive deductions for their charitable contributions of clothing and other goods is vital to the work of Goodwill, as the ability to create jobs and provide services depends on those contributions. Congress and the Obama administration are considering making changes to the tax code which could affect charitable giving to the detriment of our nation’s nonprofits. Goodwill has urged Congress to support the charitable deduction and federal supports in order to strengthen the lives of people we serve.