It's the season for charitable giving. And the trick is to make sure your money actually goes to a charity, not some fundraising outfit.
You might be stunned to learn how much money some professional solicitors keep for themselves and the paltry amount they turn over to charities.
State Atty. Gen. Xavier Becerra last week released a 274-page report that listed details on $581 million in charitable contributions collected from Californians by commercial fundraisers in 2016. The good news is that, on average, 69% went to the charities and the solicitors kept 31%. But that's not the whole sordid story.
The report shows that many charities netted very little — less than 20%, or even zilch. Some wound up being in hock to the fundraisers for their ineffective or overpriced work.
Other charities, meanwhile, reaped 80% or more of their fundraisers' collections.
This particular donating season is unique because, for millions of people, it could be their last — at least giving at the level they traditionally have. That's because President Trump and the Republican Congress are playing Scrooge.
If a GOP tax plan is enacted, it could kill a strong motivation for donating to charities. That motivation is the ability to deduct the donation when paying federal income taxes.
It's looking like the charitable deduction itself will be preserved. There's too much political heat to kill it. But so many other deductions are likely to be scrapped that there'll be much less incentive to deduct anything.
Millions of taxpayers will merely file their taxes using the "short form" with its nearly doubled standard deduction — $24,000 for married couples, $12,700 for individuals. They'll skip the labor-intensive "long form" with its itemizing of deductions.
No longer, it seems, will they be able to deduct the biggie: the state income tax, and California's is the nation's highest. Local property taxes also may be eliminated, or at best capped at $10,000. Another deduction headed for the shredder is interest on student loans.
Without itemizing, there can be no deducting of charitable contributions.
Currently, 30% of American taxpayers itemize. The number is slightly higher in California. Experts are predicting that will drop to 5% if the GOP plan is adopted.
So this could be the last good year for many middle-class Americans to contribute to charities. And the checks must be written by Dec. 31 to be claimed on tax returns for 2017.
If you're like most people, contributing is a crap shoot. If the name sounds good — has words like "police," "veterans" or "cancer" — you're inclined to write a check. But be wary.
"It's important to ensure the charities that support causes near and dear to our hearts are the real deal," Becerra says in a news release.
"Unfortunately, some bad actors will try to take advantage of this generosity. I urge all Californians to be vigilant and do a little research to ensure that their charitable giving goes directly to those who need the help and not to unscrupulous scam artists."
Yeah, right! "Do a little research." Most everyone I know has suddenly realized it's almost Christmas and they're frantically shopping. It's also party time. If they're thinking at all about charities, their focus is on getting those checks in the mail before year's end.
But for people who really do want to research, they can go online to the attorney general's website: oag.ca.gov/charities. Dig around. Good luck. It's tough to find.
Among the worst offenders are fundraisers for public safety charities. Plowing through the attorney general's report, I found several worthy-sounding police and fire groups that received very little from their solicitors. Of course, when these guys reach you on the phone, they sound like they're poised to go out on patrol or climb on the fire engine.
"Don't be pressured by telemarketers," Becerra cautions. "Don't fall for pressure tactics or threats. … If you feel pressured or threatened, just hang up."
I usually hang up anyway.
And when I get a mail solicitation with a nickel or a dime from some outfit that asks me to return it, I stick the coin in my pocket and trash the rest of the envelope's contents. If the charity can afford to mail money to millions of people, it doesn't need my check.
Another gripe of mine is that charities — or their fundraisers — clog my mailbox all year long asking for more, never satisfied with my end-of-year donation. Give in December and get pestered every month.
That's partly because charities sell my name and address to other groups. Those measly $40 to $75 contributions barely pay for the solicitation. So they peddle my personal information.
Better to donate $200 or $300 to a few local charities you know something about and can keep an eye on. There's a journalism scholarship fund I particularly like.
"Give to organizations you trust," the attorney general advises.
One thing I especially don't trust is the GOP tax plan that would disincentivize charitable giving.
It's an expensive Christmas present for big corporations and the top 1% of taxpayers, but a lump of coal for many of us — particularly charities.
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