How Supporting Your Favorite Nonprofit Can Help At Tax Time

I’m going to preface this by saying I am not a tax expert and you should always talk to your tax professional for clarification and advice. 
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Now, having said that, I do want to add some credibility to why I’m writing on this topic. I have been involved with nonprofit organizations for a combined six years and I truly believe that nonprofits are the backbone of this world and have an impact that can’t be matched.  I am also a business owner and know the importance of tax write-offs to help my one-woman show come tax time. 
 
Nonprofits like the Olivia Caldwell Foundation rely on grants and donations from generous individuals, businesses and foundations. The beauty of getting to partner with people whose values align with the work we do at OCF, is that the relationship is mutually beneficial. 

Donors get to be a part of a movement that combines the good of a community to make a greater impact than any one individual can do alone. The nonprofit is therefore able to work on fulfilling their mission with a team of passionate supporters on their side. 
  
Whether you choose to make a large donation at the end of the year to help your bottom line on taxes or you prefer the consistency of an automatic monthly contribution- donors are putting their hard earned money back into causes that they care about. 

When it comes to tax deductible giving to a nonprofit organization there are a few things to take into consideration. 

1. Your charitable giving will qualify for a tax deduction only if it goes to a tax-exempt organization, as defined by section 501(c)(3) of the Internal Revenue Code. 
2. Have proper documentation of your giving. You should receive a donation receipt of some sort from the nonprofit if your donation was tax deductible which it may not be in all cases. For example, if you purchased an item at an auction it only qualifies as a donation if you paid over the value of the item because you received something in return for your money. You may not have to itemize your donations if you fall within a certain amount of giving but it is important to have documentation in the off chance you get audited. Follow up with the nonprofits you have donated to if you haven’t received a donation receipt.
3. Don’t miss out on tax deductions from volunteering. While you can’t write off your time for volunteering you may be able to use some of the expenses incurred during your time volunteering as write offs. For example, the mileage for driving to an event you volunteer at.

As a business owner, donating either goods, services or money to nonprofit organizations helps in so many ways. Here’s a few:

• Donating an item or service for an auction is not only a great way to get your name in front of prospective customers but it’s a great way to align your business in the community as a philanthropic business.
• Making a monthly donation or donating a percentage of sales also allows you to market your business as being charitable. 91% of consumers switch to brands that support charitable causes. 

Talk with your tax professional before you submit your taxes this year and see how your donations from the previous year can be used and make sure to come up with a plan for giving in 2022 to take advantage of the tax benefits.
Resources from Tax Deductible Donations: Rules of Giving to Charity - NerdWallet

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Allison Harker, Community Relations Manager

Allison has a background in non-profit work, which has always held a special place in her heart. Having a deeper meaning to the work she does is really important to her. She looks forward to supporting OCF and growing with the organization to make a difference in the lives of families here in Wyoming. ​