After an orgy of spending on Black Friday and Cyber Monday - two of the busiest shopping days of the year - can Americans climb back into the ring, and empty their wallets again today on Giving Tuesday?
You bet. Take 2015, where 700,000 charitable givers stood tall on Giving Tuesday, generating $116 million in online donations, according to GivingTuesday.org.
And why not? Studies show that donating to charity can not only make you happier, but it can lower your tax bill.
"For example, if you are in the 33% tax bracket, a $100 donation to a qualified charity can result in a $33 federal tax break, so the donation only 'costs' you $67," says Kay McFarlin, president at TIAA Charitable.
So, what does that mean to you? "If your budget is $100, you could donate more - say, $133 - knowing you may qualify for a refund," McFarlin adds. "Or, you could decide to add another charity to your list. Do the math, and you'll soon see your personal commitment to giving can have a big impact on your tax benefits and charities when you put your tax savings back into donating."
Go ahead and give what you can afford, but do so smartly - using these five tips as a spring board to a healthy, happy and generous Giving Tuesday:
Find the right charity - With more than a million charitable organizations in the United States alone, picking a charity can be a daunting task, says McFarlin. "Certain causes may tug at your heartstrings, but once you've identified your passion, doing a little fact-finding is an important first step to ensure you're giving wisely," she notes." Use TIAA's charity search tool to find the charity that meets your giving needs. The search tool includes rankings and insights into its past performance including tax records and ethical conduct.
Give to organizations, not individuals - "You are only eligible for tax deductions after giving to qualified recipients," McFarlin notes. "For instance, if you give directly to someone in need, you are helping that person, but you won't be eligible for a tax deduction. For the tax benefit, giving to a charitable organization is a better option." To know for sure if the organization is eligible to receive tax-deductible charitable contributions, make an inquiry to the charity itself or check with the Internal Revenue Service of its tax status. "Just simply look for IRS recognized charities eligible to receive tax-exempt contributions," she says.
How you pay counts - Claire Costello, a charitable giving expert at U.S. Trust, says that giving with cash ensures that 100% of your gift goes to the charity - just make sure to ask for a receipt or official acknowledgment for tax deduction purposes. "Credit cards, meanwhile, can have the added bonus of incentive programs such as those that give rewards points for charitable donations," Costello says.
Give now - decide later - "If you're planning for a charitable tax deduction this year but are undecided about which nonprofits to support, consider opening a donor-advised fund," says Dale Horn, senior vice president of wealth management at UBS in Baltimore, Md. "You can claim the deduction for contributions to your fund now even though distributions from the fund might be made in future years."
Explore employer gift matching programs - "Many companies offer gift matching programs that can increase-even double-the impact of your gift," says Horn. Check with your company's human resources or community relations director, if your firm has one, for more information.
Nobody is saying that charitable giving should occur only on one organized day a year. But Giving Tuesday does provide a direct opportunity, with plenty of professional help, to donate to a favorite cause.
It could be the most important gift you give all year.
Find out more at GivingTuesday.org.