Charitable Giving for Japanese Disaster Relief

First, my thoughts and prayers go out to those affected by the events in Japan. The stories and photos coming out of Japan are just heartbreaking.

I know that many of you, like me, want to know what you can do to help out in what is being referred to as Japan’s ‘most difficult crisis’ since World War II. Giving money in times like these can be tricky since in addition to making sure your dollars are used wisely – and get where you intended for them to go – there can be tax considerations.

(Okay, this is the part where I often get hate mail about how people should give to charity regardless of a tax deduction. Agreed. And statistically, the majority of Americans don’t claim a deduction for the dollars they donate to charity. That said, the deduction exists and it makes sense to take advantage of the deduction if you’re inclined to be charitable. Why wouldn’t you? So with that brief disclaimer, I’m continuing on…)

Here are a few tips:

• Cash is king. While you may want to send food and other items, the infrastructure may not support those donations. Cash (or cash equivalent) is generally preferred.
• Stay put. Yes, we all want to get on a plane and help. But again, the infrastructure may not support those efforts. Your dollars are more helpful.
• Be smart. The same rules for charitable giving apply. Be wary of personal solicitations on your doorstep or over the phone. Make sure that your gifts made by checks or credit card gifts are secure.
• Do your homework. Check out the credentials of a potential donee/charitable organization before you make a donation. Charity Navigator is a great site to gather information (that link takes you directly to the Japanese earthquake relief part of the site). You can also confirm charitable status through the IRS web site – remember that some organizations (like churches) may not be listed, so ask the organization for more information if you’re not sure.
• Rely on oldies but goodies. There’s nothing wrong with new charitable organizations but there is something to be said for those that have been around for awhile. Brand new organizations may not have the facilities in place to offer the most effective relief.
• Remember the rules. The rules for charitable giving still apply, even in a disaster of this magnitude. That means that only contributions to domestic tax-exempt charitable organizations are deductible. However, those that provide assistance to individuals in foreign countries qualify for charitable deductions (think Red Cross, etc.) so long as they otherwise meet the rules as domestic tax-exempt charities. Again, check with the IRS – or ask to see the organization’s credentials.

平和
(peace)

Kelly Phillips Erb

Kelly Phillips Erb is a tax attorney, tax writer, and podcaster.

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