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Sirote & Permutt Estate Planning Alert: What to Know Before Donating

May 24, 2013

Americans and Alabamians are generous. We immediately respond to disasters with our prayers, time, money and non-cash gifts to help those in need. In the wake of the recent tornado disaster in Oklahoma, we offer a few timely reminders to make sure your donations count.

First, be careful to give to a reputable organization. As disgusting as it may be, natural disasters bring scammers out of the woodwork. Before you give, make sure you are dealing with a legitimate charitable organization. Local churches, synagogues and groups such as Christian Service Mission in Birmingham often have programs for tornado relief, both locally and nationally. If you are not sure of the organization you are considering for a donation, you can check the online version of IRS Publication 78 or consult with a website such as Charity Navigator.

Second, consider what your donation will be used for. Different nonprofits focus on different areas of relief. Do you want to ensure that your donation is used for rebuilding, or perhaps providing shelter? Some international charities, such as Red Cross, respond to disasters in all parts of the world, so if you want to make sure your donation goes to Oklahoma, earmark it for use in Oklahoma only. Also, make sure any non-cash gift you make is going to be useful for the disaster recovery. Check with organizations for a list of supplies needed. Often, bedding and blankets are not the first items needed, whereas cleaning supplies and tools such as shovels and rakes are needed right away.

Finally, make sure your gift is tax deductible. To deduct a monetary gift, you must maintain a bank record or written communication from the qualified charitable organization containing the name of the organization, the date and the amount of the contribution. For the popular text message donations, a telephone bill will meet the requirements if it shows the name of the organization, the date of the contribution and the amount. Donations of non-cash property are valued at their fair market value. Clothing and household items must generally be in good used condition or better to be deductible.

Timely contributions can make all the difference in the world to those who have been affected by a disaster. However, a little due diligence can make sure your donation reaches those intended for the purposes intended, and that you can take a charitable contribution for your gift.

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