Charity and taxes

5 min read

The discussion

In a recent discussion with young donors about giving and its relation to filing taxes with deductions, a proposition made:

Taking a deduction on your taxes for charitable giving is the same as giving for the purpose of the tax deduction.

We at Mite felt that our approach to the matter created a defined line between charitable giving and the deduction taken on taxes. However, thinking through the matter did challenge our perceptions on the subject. It was interesting that these young givers would have such a solidified viewpoint on the matter. In their mind, there seemed to be no question that if a person gave, regardless of their motive, and then took a tax deduction, their giving was tainted by the benefit of paying less taxes. Frankly, after thinking it through we could certainly feel some leaning toward their persuasively argued position.

At Mite we provide Donation Receipts to our donors for the purposes of reporting donations to the tax authorities. This is done to help our Miters with their tax filings. We most certainly do not hold to this practice in order to diminish the giver’s contribution or to somehow change it from what it should be - a willing and joyfully given sacrifice, to just some kind of personal tax benefit. But looking through the data on giving in the U.S. it is possible to see the statistical support of this young man’s argument.

Stats on giving & taxes

A couple of noteworthy stats include:

  1. Just under ⅓ of all annual giving is done in the last month of the year.
  2. 10% of all online giving happens in the last 3 days of the year.

Now, while these stats make a compelling argument that people may be trying to get their donations in to secure their tax deductions, there could be other reasons for this trend in giving. For one, there is the possibility that people are moved more to give during the holiday season. After all, Giving Tuesday is at the very end of November and Christmas does tend to promote a generous attitude.

Needs all year long

It is very much true that people are in need all year long. There is no shortage of need in June as opposed to December. So why is giving not spread evenly among the months? Well, another argument may be based on the fact that people are procrastinators. This is true in many, if not most, instances. However, procrastination, in and of itself, is not a valid explanation for the lopsided giving reported at the end of the year. If we cared about giving, we would give when the need was made evident, and needs are not waiting around for December to hit. What about this last 3 days statistic? That is a huge number! What is so special about the last 3 days of the year?

That stat right there is very hard to refute as it relates to giving and deductions. It would definitely support the idea of people last minute giving to meet the end of year cutoff for charitable giving deductions. But does it eliminate the possibility of people desiring to give, not based on deductions, but based on a willingness to help?

Ultimate truth

Ultimately the truth behind the motivation to give can only be revealed within the heart of the giver. At Mite we see nothing wrong with receiving a tax benefit for your charitable giving. Seems like a smart move to report your donation activity if the governmental authority is willing to give you a break on your taxes for it. However, there is so much more to giving than a tax benefit. This much more should not be forfeited by the giver by making it about a tax break.

We encourage everyone to give all year long - whenever needs are made known and for the sole reason of helping others. Give because it is a wonderfully beautiful thing. You will be sure to be blessed when you give freely and willingly. In fact, that is as sure as both of those other sure things. What were they again? That’s right - death and being able to report your charitable giving on your taxes!