Managing Your Charitable Contributions

If you’ve ever donated money to a charitable organization, you’ve probably experienced the immediate and ongoing communications from that charity asking you for more money. While I understand the organization’s need to generate funds, it’s frustrating to me that this is how some of my donation is being used. Is it likely that, having just made a donation, I will make another one so soon? Well, maybe I would if I were disorganized and didn’t know how recently I had just donated to them.

That is one reason why it’s important to track your charitable donations. Another is to simplify the reporting of your donations at tax time. Since we are at the beginning of the year, this is a good time for you to start tracking your donations, if you aren’t already.

I manage my charitable giving in a simple Excel spreadsheet. It has the following columns:

  • Charitable organization
  • Date of gift
  • Amount
  • The same three columns for last year.

I keep my spreadsheet sorted by the name of the organization. When I get a piece of mail from a charity asking me to donate, I can easily look it up on my spreadsheet and see when I last donated. I like having last year’s donation information easily available, since I donate to most of my pet charities once a year, and it’s helpful to see when I donated last year, and how much.

Having my donation information in a spreadsheet makes it easy for me to know exactly how much I have donated that year.  At the bottom of the spreadsheet, I also keep a list of my “in kind” donations — that is, the thrift shops to whom I have brought bags of goods, along with my estimate of how much those goods were worth. At tax time, I can easily report to my accountant the total amount of my tax-deductible cash contributions, as well as my in kind donations.

In case you get audited (as I did this past spring), it’s also important for you to keep the acknowledgement letter that you get from each charity. It tells you how much of your donation was tax-deductible, and verifies that you received no goods or services in exchange. When I was gathering my papers for my audit, I discovered that for on-line donations, the acknowledgement I received did not always have that information on it. I ended up having to contact some of the charities to ask for the appropriate documentation. That is why I have started making donations by mail again, as the mail acknowledgements are generally better.

If you have no surefire way to track your charitable giving, take a few minutes now to set up a spreadsheet on your computer. You’ll thank me next year at tax time!



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