What You’ll Learn:
As you read about making tax-deductible donations in AZ, you’ll be learning:
- The benefits of making charitable donations
- How your contributions make a difference in your community
- A few tips for tax-deductible giving
5 Reasons to Make Tax-Deductible Donations
There are so many reasons for making a contribution to a non-profit organization, not the least of which is the significant difference you can make for your favorite charity. No matter the size of your charitable contributions, you can feel good about your role in supporting the efforts of charities in your community and beyond.
But did you know that beyond that, there are actually many more reasons to keep giving? In fact, the power of philanthropy is supported by a variety of interesting statistics and personal reasons alike. In particular, receiving tax credits is one of the most popular reasons that people can contribute, and here’s why.
5 Reasons Why You Should Make a Tax-Deductible Donation
- You could be eligible for state tax credit.
Many people don’t realize that cash contributions to certain approved non-profits can make you eligible to receive Arizona tax credits. There are two different tax credits in Arizona available to individuals who choose to donate to qualifying organizations: one for Qualifying Charitable Organizations (QFCO) and the other for contributions made to Qualifying Foster Care Charitable Organizations (QFCO).
As a Qualifying Foster Care Charitable Organization (QFCO), Arizona Friends of Foster Children is included on the state’s list of qualifying charities for AZ tax credit. Individuals, heads of households, and married couples filing separately are allowed a credit of up to $500, while couples filing joint returns can qualify for up to $1,000.
- You will be a part of a larger movement to give back and change our world for the better.
A growing number of Americans are making contributions to charities around the globe, showing that generosity is trending in a wonderfully upwards direction. In 2019, Americans gave nearly $450 billion to non-profits and other charitable causes, representing more than a 5 percent increase from the year before.
There are many reasons that charitable giving is on the rise, not the least of which include increased awareness and easier donation methods. Thanks to widespread access to information, more people than ever are learning about important social causes and the organizations that support them. And with simple ways to donate, such as making an online contribution, it’s never been easier to give back.
- You could be starting a new family tradition and leaving a legacy of giving.
Did you know that adults are far more likely to donate to charity if their own parents were donors, according to information from the Indiana University Lilly School of Philanthropy? This means that when you decide to donate, you could be building a legacy passed down for generations. What an incredible impact to have on not just your own family but the future of the world in general.
A tax credit can make your contribution more affordable.
In Arizona, you can receive a dollar-for-dollar credit for your donations to Arizona Friends of Foster Children and other QFCOs, which is a wonderful way to make a cash contribution more feasible. One of the reasons that people choose not to donate to charity is their personal budget: for many individuals, financial contributions may not be feasible. However, because a qualifying donation can have positive tax implications in the form of a credit, you may find that you’re able to afford to donate after all.
For example, let’s say you make a $500 donation to Arizona Friends of Foster Children. At tax time, you can receive a matching tax credit of $500, and it’s almost as if that contribution was “free.” Rather than contributing out of pocket, you can consider it a gift that was essentially repaid in the form of a credit.
Research shows that giving is actually good for you.
Most of us would agree that we feel good after making a contribution to a charity we care about, but did you know that there are actual tangible benefits to giving? According to a study from Harvard Business School, giving a financial gift usually has a greater impact on happiness than spending the money on yourself.
And that “warm and fuzzy” feeling you may experience has a lot to do with the regions of your brain that are activated by charity: the National Institutes of Health discovered that donating to charity activates the parts of your brain connected to trust, pleasure, and social connection. Beyond that, it appears that giving is actually good for your health as well. Charitable contributions have a positive effect on the length of life, perhaps because giving back is an excellent way to counteract everyday stresses.
Tips for Making Charitable Donations that Reduce Your Tax Bill
When you make a contribution to a non-profit organization, knowing that you have made a difference can be a wonderful reward in itself. However, having the ability to factor that donation into your tax deductions is a significant benefit as well. For many individuals, the donation deduction is what makes it possible to give back to the organizations that are close to their heart.
If you’re considering making a charitable contribution this year, here are a few tips to keep in mind:
- If you want your donation to be considered for a tax credit, you will want to be sure that your selected charitable organization is an eligible organization, as defined by the state. Not all organizations that accept donations qualify, so it is important to do your research. The Arizona Friends of Foster Children Foundation is a 501(c)(3) nonprofit organization (Tax ID: #86-468850), tax-exempt, and a QFCO in Arizona.
- Familiarize yourself with the IRS rules for charitable donations before you make a contribution, as well as during tax time. That way, you can know exactly what to expect in terms of a potential deduction for your tax returns.
- Remember that there is no substitute for working with an experienced tax professional. We highly recommend consulting with a knowledgeable tax expert, so that you can be confident that you are well-informed.
Change a Child’s Life with Your Contribution to the Arizona Friends of Foster Children Foundation
When you become a donor to the Arizona Friends of Foster Children Foundation, you are making a direct impact on children within our state’s foster care system. Not only is your contribution eligible for a tax credit, but it is also specifically used to benefit Arizona children. For nearly 40 years, we’ve been working to improve the lives of children in foster care and ensure that they have the childhoods they deserve – and your contributions enable that.
So, exactly how does your donation make a difference? We are proud to say that 90% of every dollar donated to our foundation goes to our programs, with just 10% used for fundraising and other administrative efforts. That means that when you give back to the Arizona Friends of Foster Children, you are playing an important part in programs such as Keys to Success, AFFCF post-secondary scholarships, and the Bobby Edd Penson Fund. Through these programs, children in foster care can build valuable experiences and receive the support they need to create a happy, healthy future full of possibilities.
Make your donation to the Arizona Friends of Foster Children Foundation now to begin helping us write happier endings for the stories of countless children in foster care in our state.