A Quick Guide to Deducting Your Donations

A Quick Guide to Deducting Your Donations Header Image

Overview

Donations to 501(c)(3) nonprofits are tax-deductible. This means that when you make a contribution to an organization that has been designated as a 501(c)(3) by the IRS and you have not received anything in return for your gift, you are eligible for a deduction when you file your taxes.

Important tax changes in 2020

The CARES Act, enacted by Congress in spring 2020, includes a special $300 deduction designed especially for people who choose to take the standard deduction, rather than itemizing. Your donation through December 31, 2020 to 501(c)(3) nonprofit organizations will qualify for this incentive and can be claimed on your 2021 taxes even if you take the standard deduction. Learn more at IRS.gov.


How to make sure your gift is fully tax-deductible

Ensure your donation is directed to a 501(c)(3) organization

Organizations that receive a 501(c)(3) designation from the IRS are typically service providers and are not involved in political or lobbying activities. For example, a contribution to your local animal shelter that is involved in rescuing pets, providing them shelter, and finding them new homes would be tax-deductible. However, a gift to your favorite political candidate’s campaign would not be.

A quick tip: Charities must receive a 501(c)(3) designation to qualify for a Charity Navigator rating. You can see an organization's IRS designation on its profile page:

View the IRS subsection on a profile page for an organization rated through the Star Rating System:

501c3 status circled on Star Rating System

View the IRS subsection on a profile page for an organization rated through the Encompass Rating System:

501c3 status circled on Encompass Rating System

Check to see how much of your donation will be tax-deductible when attending events

Did you attend a gala or dinner fundraiser this year? The cost of your meal (what the organization pays for the venue and your dinner) is not tax-deductible, however, anything in excess of that cost may be. Contact the organization to find out.

Make sure you obtain receipts for your donations

We know it’s annoying, but it’s important to hold onto all of your donation receipts. This will help you keep track of all of your charitable giving when it comes time to file your taxes, and provide you with records of your gifts if you were to be audited.

It is important that your donation receipts include language stating the date the gift was made, the amount of the gift, how the gift was made (cash, stock, in-kind, etc.), and that no goods or services were received in exchange for your gift.

Donate before the New Year to claim the donation on your annual tax filing

For this tax year, this means your contributions must have been made between January 1, 2020, through December 31, 2020. If you’re one of the many people who wait until the last week of December to make their donations, make sure your receipts are all properly dated for the 2020 calendar year.

Connect with an accountant or financial advisor

For specific questions about filing your taxes, deducting charitable contributions, or planning for future charitable giving, it is always best to seek the opinion of a professional accountant or financial advisor.

Consider using Charity Navigator's Giving Basket for all of your donations

If you’re looking for your receipts after giving through Charity Navigator’s Giving Basket, log into your account to see your donation history. (You can also manage your recurring donations through this page if you’re looking to give even more this year).

For even more tips and information, check out these additional resources: