Incentives to Donate Real Property in a Busting Economy
An economic recession always influences spending, and the current stock market dips and housing market busts are creating a recession atmosphere. Economic turmoil leads people to cut back on luxuries or delete them from their budget entirely. Among the first “fat” trimmed from a budget is charitable giving. The irony is that as the economic downturn continues, more people need help from charitable organizations and fewer people aid in funding those organizations that provide the increased workload and support. People focus their spending on providing the basics for their families, and those who do continue to fund charities shift their focus to gifts with the best tax incentives instead of funding preferred or pet charities. These shifts in donor behavior change the way charitable organizations solicit donations. This comment will discuss recession-wise giving through donations of real estate.
The government prefers to give tax deductions to donors who fund organizations that provide social services instead of funding and providing these services. Charitable organizations can specialize in certain services allowing for more effective and efficient administration than the government can provide. This is especially true in times of economic hardships when the government cuts funding for many programs. The nonprofit organizations must increase fundraising to provide for the increased need for services and overcome the decreased government funding.
This comment will discuss the history and background of the charitable donation tax deduction, and it will look into the changing trends of donating real property, including the decision to donate, how much to donate, and to which charity to donate. Moreover, this comment will address proposed legislation and recommendations toward donation decisions in the best interest of the donors and the charities. Ultimately, this comment will show how individuals and businesses can focus on donations of real estate toward tax benefits, while giving the greatest benefits possible to the chosen charity.