The Power of Cash Donations: Transforming Lives Through Charity
In the world of charitable giving, donating cash to a charitable cause stands as the foundational strategy to anyone looking to make an impact. Indeed, the ease and simplicity of donating cash makes this strategy one of the most popular ways to give.
The Pros of Cash Donations
1. Easy for You and The Charity
Giving cash in today’s world is as easy as responding to a text message and entering a few details. Cash is then transferred to the charity directly. You can also give via check, direct transfer between banks, and even credit cards. For those who still tote around cash, simply dropping money into a bucket can be effective though you’ll have to document that for tax purposes to receive a deduction.
While other donated assets can be a challenge for a charity to figure out how to use, any charity, even small ones, will know how to use cash.
2. Immediate Completion
Cash is the fastest way to donate to a charity as it is often immediate. The donor gets the deduction when they intend to and the charity is able to use the money right away.
3. The Donation is Precise
With cash, the donor knows exactly how much they are donating. No need for valuation and looking at the day of transfer.
4. Highest Deductibility Limits
Different donated assets have different deductibility limits. Cash has the highest level of deductibility which means a donor can offset more income through cash deductions than other methods.
Disadvantages of Cash Donations (There Aren't Many)
1. Tax Advantages of Other Assets
Other assets such as retirement accounts, appreciated stock, business interests, or real estate may provide overall higher tax benefits for the donor.
2. Donation Flexibility
If a donor wants to give $50,000, they have to have $50,000 in cash to do so. For most people, free cash does not represent a significant portion of their assets so they may be limited. Whereas other assets may represent a much larger portion of their assets.
Conclusion
Giving to charity through cash is a great way to provide immediate support for the causes you care about. It is an easy way to get started down the path of philanthropy. Giving cash is one of many paths to consider in a giving strategy. This article is part of a series of articles focusing on charitable giving strategies. Check out this article for more strategies: The Comprehensive Guide to Charitable Strategies – Gilbert Wealth