• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Prosper Blog

Personal Loans Home Equity Line of Credit (HELOC)
  • Blog Home
  • Financial Literacy
    • Credit Score Information
    • Establishing Credit
    • Financial Trends
    • Interest and APR Information
  • Credit Management
    • Budgeting
    • Debt Consolidation
    • Managing Debt
  • Financial Wellness
    • Best Practices
    • Financial Habits
    • Financial Lifestyle
    • Saving and Investments
  • Finance for Homeowners
    • Home Equity
  • Investor Center
    • Investor Updates
    • Performance Updates
    • Quarterly Investor Updates
    • Tax Guides
  • Prosper News
    • Company News
    • Press Releases
    • Product Announcements

What Are the Tax Benefits of Donating to Charity?

December 8, 2020 by Taylor Rohwedder

‘Tis the season of giving, and with that, you might be wondering about the tax benefits of donating to charity. As American historian, author, and social justice advocate Mary Ritter Beard said, “The results of philanthropy are always beyond calculation.”

Tax benefits of donating to charity, Prosper Blog

Philanthropy is key to living a fulfilling life, not only because of the possible tax benefits of donating to charity. Sure, tax deductions could lower your tax bill, but being charitable does so much more than just help you. It serves your entire community.

There are countless ways to give back to others. You can donate money or goods to a non-profit organization in your town, helping to improve it. You might make a financial contribution to an organization researching disease treatments. You could also support civil rights non-profits fighting to make the world safer. Whether it’s kids, vets, seniors, animals, institutions or the environment, there’s no wrong way to give back.

Of course, during financially tough times, it’s hard to justify giving money away. Yet, there’s a strong case to be made for making charitable giving a routine part of your life. Let’s explore how you might benefit financially and emotionally from giving back.

In This Article

  • What Are the Tax Benefits of Donating to Charity?
  • Four Ways to Receive the Tax Benefits of Donating to Charity
  • Three Other Benefits of Donating to Charity

What Are the Tax Benefits of Donating to Charity?

You should consult a tax accountant to fully understand the tax benefits of donating to charity. Generally speaking, though, you could expect to deduct donations against your income tax. Keep in mind, you have to itemize to take a charitable deduction. If you do itemize your deductions, make sure your total individual deductions are greater than the standard deduction.

Four Ways to Receive the Tax Benefits of Donating to Charity

Not everyone has the means to donate large amounts of cash. But, there are countless other ways you can give back and reap the tax benefits of donating to charity.

1. Make a Small Recurring Donation

No amount is too small to make a difference. Consider setting up an automatic, recurring donation to a cause that’s close to your heart.  You won’t miss that $5 or $10 each week, and you’ll feel good knowing that you’re doing good.

2. Donate Unwanted Clothes and Goods

Goodwill and the Salvation Army accept donations of clothes, toys, furniture and more. Non-profits like these sell your old items in their stores to fund community programs. For example, Goodwill funds job training and placement services for people who struggle to find traditional employment.  Simply make a fair estimate of your donated goods’ value, ask for a receipt, and keep it handy for tax time. Find a Goodwill location near you.

3. Donate an Old Car

Did you know that you may be able to donate your old car and receive the tax benefits of donating to charity? It could even be more beneficial financially than selling your car for cash or trading it in. Organizations like Kars4Kids, Cars Helping Veterans and the Make-A-Wish Foundation all accept cars as a 100% tax deductible donation.

4. Donate In-Kind Capital Gains

According to the mutual fund powerhouse and investing thought leader Vanguard, “When you donate appreciated assets to a 501(c)(3) public charity, you don’t incur the capital gains tax. Just make sure you donate those assets in kind rather than selling them first.” If you expect capital gains from your investments, consult a tax accountant before making any donation decisions. 

Three Other Benefits of Donating to Charity

1. Boost Your Mood

Knowing that you’re responsible for helping others can be like serotonin for the soul. This is especially true when giving to smaller local organizations and people in your own community. This way, you can see and feel how your contributions have helped those around you.

2. Be the Change

Gandhi said, “Be the change you wish to see in the world.” It may sound cliche, but by making even small donations, you have the opportunity to do just that. You might even inspire your kids, friends, and family to do the same. Being the philanthropic ripple that creates waves is a worthy life goal.

3. Improve Your Community

You might start giving back because of the tax benefits of donating to charity, but soon you’ll find that philanthropy is a win-win.

Your charitable donations could give your community the support it needs to thrive. You might help restore an historic building, allow disadvantaged kids to take part in life-changing arts programs, or revitalize a local park.

Melinda Gates, who donates millions every year, says, “Philanthropy is not about the money. It’s about using whatever resources you have at your fingertips and applying them to improving the world.” You don’t need millions to make a real difference. You, too, can help your community and people across the globe with your cash, cars, investments and household items. The best part is the immense joy that comes with giving, even more so than the tax benefits of donating to charity.

Read more: Jumpstart Your Financial Well-Being

Share this post:

Share on Facebook Share on Twitter Share on Reddit Share on Pinterest Share on LinkedIn Share on Email

Financial Literacy, Financial Trends, Prosper Blog

Primary Sidebar

Connect with us

Facebook Twitter LinkedIn

For press releases and media inquiries: Prosper in the News or [email protected]

Categories

  • Blog Home
  • Financial Literacy
    • Credit Score Information
    • Establishing Credit
    • Financial Trends
    • Interest and APR Information
  • Credit Management
    • Budgeting
    • Debt Consolidation
    • Managing Debt
  • Financial Wellness
    • Best Practices
    • Financial Habits
    • Financial Lifestyle
    • Saving and Investments
  • Finance for Homeowners
    • Home Equity
  • Investor Center
    • Investor Updates
    • Performance Updates
    • Quarterly Investor Updates
    • Tax Guides
  • Prosper News
    • Company News
    • Press Releases
    • Product Announcements

Recent Posts

  • Prosper Performance Update – March 2021
  • What the Extended Tax Deadline Means for You
  • Paying for Childcare and Receiving Childcare Assistance — What to Know
  • How to Apply for a HELOC Online, Plus 5 Benefits of an Online HELOC
  • Saving vs. Investing: What’s the Difference?

Prosper LoansFollow

Prosper Loans
ProsperLoansProsper Loans@ProsperLoans·
4h

Are you attending @LendIt's #USA2021 next week? Our very own Haiyan Huang will sit on the panel that takes a deep dive into loan performance during the pandemic. Join this discussion on Tuesday, April 27. https://www.lendit.com/usa/2021/register/

Reply on Twitter 1384520997735370754Retweet on Twitter 1384520997735370754Like on Twitter 13845209977353707542Twitter 1384520997735370754
Load More...
  • Best Practices, Financial Wellness, Prosper Blog
    Medical Bill Debt: What Happens If You Don’t Pay Medical Bills?

    Even before COVID, expensive healthcare costs had many Americans wondering...

  • Finance for Homeowners, Home Equity, Prosper Blog
    Using a HELOC to Pay Off Your Mortgage

    Taking out a HELOC to pay off your mortgage is a common practice among many...

  • Credit Management, Managing Debt, Prosper Blog
    Emergency Loans With No Job: Options for the Unemployed

    While the unemployment rate in June showed a decline to 11.1%, that ra...

  • Financial Wellness, Prosper Blog, Saving and Investments
    Saving vs. Investing: What’s the Difference?

    Commonly confused, both as words and concepts, saving and investing are no...

  • Finance for Homeowners, Home Equity, Prosper Blog
    The Struggle to Access Home Equity: How to get a HELOC During COVID-19

    COVID-19 has drastically changed our lives in many ways — from jobs to...

Footer

  • Borrow
  • Invest
  • About Us
  • Press
  • Blog
  • Careers
  • Help Center
  • Contact Us
  • Legal
  • Prospectus
  • Financial Professionals
  • Developers

Prosper and WebBank take your privacy seriously. Please see Prosper's Privacy Policy and WebBank's Privacy Policy for more details. Prosper makes no representations as to the accuracy or completeness of any information provided on this Blog, which is intended for discussion purposes only. Opinions expressed in articles posted to this blog are the author’s own and may not reflect the opinions of Prosper. All personal loans made by WebBank, Member FDIC.

Prosper’s Notes are offered by Prospectus filed with the SEC. Notes are dependent for payment on unsecured loans made to individual borrowers. Notes are not guaranteed or FDIC insured, and investors may lose some or all of the principal invested. Prosper does not verify all information provided by borrowers in listings. Investors should review the Prospectus and carefully consider these and other risks and uncertainties before investing. None of the information provided on this Blog is intended to be investment advice.

Prosper Marketplace, Inc. NMLS#111473 (http://www.nmlsconsumeraccess.org)
All HELOCs are underwritten and issued by our banking partners. Refer to www.prosper.com/heloc for more information. Links to third party sites are provided for your convenience and do not constitute an endorsement.

Equal Housing Lender

© 2005-2021 Prosper Funding LLC. All rights reserved.

Copyright © 2021 · Genesis Sample on Genesis Framework · WordPress · Log in

Go to mobile version