Is Your Election-Year Donation Tax Deductible? Here’s How to Know

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By Molly Norton and Cavan Tornga

With a major election year nearly upon us, various groups may ask you for donations. The causes and people you support likely fall into two major categories: charitable organizations or political ones. The question is, when are you making tax-deductible donations?

Charitable Organizations

You can use a donor-advised fund (DAF) or a qualified charitable distribution (QCD) from an IRA to give to legitimate charities who are registered with the IRS. Such organizations are 501(c)(3)s, named for the corresponding section of the tax code. These groups can provide you with educational information: the facts about a particular policy or the voting record of a candidate. They just cannot tell you how to vote.

Political Organizations

Political candidates or political causes may also solicit your support. These donations aren’t tax-deductible, nor can you use funds from a DAF or a QCD. These organizations/people are often candidates for office, political parties (or their organizational committees), political action committees, or organizations that promote or oppose a specific candidate or policy. Donations to political organizations are tracked and are rarely anonymous.

Many 501(c)(3)s launch lobbying arms, often called “action funds,” in an attempt to amplify their voice in the political arena.  These entities represent the political wishes of a given non-profit cause.

Resources

Reputable charity-listing websites such as Guidestar can help you determine which organizations are tax-deductible non-profits. You can also consult with the Strategic Philanthropy team at Brighton Jones—we are happy to do more research into your favorite causes.

Common questions that arise include:

  1. Would I benefit from a DAF?
  2. What effect will this have on my taxes?
  3. Should I give to an organization’s local branch or the national parent?
  4. Is it better to give to a specific program or to the general fund of an organization?

Regardless of the causes and/or organizations you wish to support, our team wants to help you bring passion and purpose to your giving.

Molly Norton is the philanthropic advisor at Brighton Jones. Cavan Tornga serves as a client service associate at the firm.

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