Donating Items of Value to Charity
- The Power of Giving
- What Are Items of Value I Can Donate?
- Charitable Donation Requirements
- The Full Benefits of Items of Value Donations
- Let’s Talk IRS Tax Deduction & Donation Values
- Charitable Donations of Items of Value
- IRS Rules for Donating Electronics
- Charitable Donation – What You Have to Do
- How the Charitable Use of an Item of Value Affects Your Tax Deduction
- Know Your Charity
Choosing to use the power of giving is one of the most important things you can do to transform your life and the life of others. Let’s discuss donating of items of value.
The Power of Giving
Imagine if the purpose of giving, was to simply have the ability to change somebody else’s reality? You’d be able to give your time, your knowledge, talents, encouragement, acknowledgment, thoughts, compliments, kindness, smiles, love, money, or physical objects like items of value. If this is the case, then don’t you really have more to give than you ever even realized?
Close your eyes and imagine that all of this was reality.
Are you there?
Well, you can open your eyes, because it is.
In every single person’s reality, objects that you no longer have use for can be so meaningful in someone else’s life; whether you are aware of their direct effects or not.
When you implement the power of giving into your life and do so generously and cheerfully, you gain the most effective techniques for creating what you wish to have within the life that you own. When combined with the practice of gratitude, you’ll be able to whip up the main recipe of happiness.
In this article, we’re going to talk about how donating items of value can benefit our incredible young students all over the world, and how the power of giving can also provide great benefits for you throughout the whole process.
So, without further ado, let’s dive in.
What Are Items of Value I Can Donate?
When it comes to what you’re able to donate, the list is truly endless. Charities are able to benefit from so many items of value, just some of those items are:
- Musical instruments (pop/rock/orchestral)
- Valuable collectibles (coins/cards)
- Electronic gadgets
- And so much more!
Some of the above, although they may not seem like much, can really amount to a lot when put in the hands of the right people.
Take donating electronics, for example, charities are able to make use of laptops for children in foreign countries so they’re able to learn English computer skills and receive a true education through the never-ending source of the worldwide web!
For musical instruments, they’re able to gain a hobby and a valuable skill. For some children, this is the biggest source of happiness they’ll find, and it can really take them away from their problems in the surrounding environment that they’re in.
Who knows? You may even help build the next Jimmy Hendrix!
Charitable Donation Requirements
Apart from the personal satisfaction you receive from helping a nonprofit, donating your extra stuff can land you a valuable tax deduction.
In order to be eligible, you have to make sure to itemize all of your deductions.
However, this only makes financial sense if the total amount of donations exceeds the IRS standard deduction amount.
The total amount you’ll have to match is $6,200 for individuals and $12,400 for married couples.
You’ll also have to ensure that the charity receiving your items is a 501(c)3 nonprofit organization, and get a receipt.
Remember, you’re not able to receive a tax break for giving items to a for-profit charity, or a low-income friend!
The Full Benefits of Items of Value Donations
It’s already a well-known fact that charitable donations are able to reduce your tax burden, this is especially beneficial if you’re in a high tax bracket. However, the benefits of charitable donations go far beyond tax breaks.
Sure, giving can be challenging; especially when money is already an issue.
You’ll probably assume that the income received from just selling your items of value could go toward a college education fund for your children or a much-needed vacation, but taking part in the power of giving can give you a lot of bang for your buck; and some really incredible emotional, social, and psychological benefits along the way.
Often, those who donate find that the satisfaction received when giving outweighs the urge to splurge on yourself or your family.
Let’s take a look at the benefits of charitable donations:
- Valuable donations make people happier in general: A study conducted by professors based in the University of Missouri proved that generous people who took part in charitable donations scored much higher on feelings of joy and contentment than individuals who did not.
- Reduction in stress: Researchers at Johns Hopkins University and the University of Tennessee found that those who participate in charitable donations experience reduced rates of stress and lower blood pressure compared to those who do not give.
- The reward center in your brain flourishes: It’s also proven that charitable contributions create a response in the brain that mimics one activated by drugs and other stimuli. This is due to the response eliciting a surge of dopamine and power endorphins that can only be described as ‘’hedonic’’ and rewarding. Charitable donations can really allow pleasure to run through the body.
- You’re able to help others in need: It’s clear that we don’t live in a perfect world, and let’s face it, there’s never going to be a perfect time to give. However, there are always people out there that need your help.
- You can lead by example and promote generosity in children: Children tend to copy everything we do. Wouldn’t it be amazing if you could implement a generous mindset in them from an early age? If everyone did it, surely the world would be a better place. Right? When children see you donating, they’re likely to adopt the same giving mindset as they grow up.
- If you can’t volunteer, give: Now, we know that this may not necessarily be a benefit of charitable donations, but if you’re way too busy to volunteer, giving items of value can be the perfect workaround. Never assume you can’t improve someone else’s life or the world itself just because you don’t have time.
Let’s Talk IRS Tax Deduction & Donation Values
It’s essential that the donated items are in fact items of value. The IRS specifies that used items must be in good condition in order to qualify for a deduction.
Furthermore, the IRS requires taxpayers to estimate their item donation at fair market value, this essentially means that you must estimate the price as the exact same that a buyer would pay for it at a resale outlet.
If you don’t have the time to do this for every item, you’re able to use Goodwill’s valuation guide for household items. You can find this here.
If you do think that your item is worth more than Goodwill’s valuation guide suggests, then you do have the opportunity to set a different value upon completing your tax return. All that must be done in this case is to retain some documentation to justify it.
Charitable Donations of Items of Value
For the donation of high-priced items, it does get a little more complicated. If you’re looking to claim that an item of value is worth more than $500, you need to include a professional appraisal with your tax return. You’ll also need an appraisal for any group of similar items that value at more than $5000.
To check if it makes sense to itemize, take a look at IRS Schedule A and see what applies to you. State income tax, property taxes, and mortgage interest are the big-ticket deductions for the majority of taxpayers. If you don’t have any of these, itemizing may not increase your deduction – and if you don’t itemize, you can’t claim a charitable deduction.
To break it down; the revenue received from a charitable donation is a reduction in taxable income from your highest tax bracket. For example, if you participate in a donation of an item of value that’s worth $200, and you currently sit in the 25% tax bracket, you would do the calculation – 25% of $200 which gives you $50. This ultimately means that your total reduction will be $50. The higher your bracket, the more you’re able to net from your charitable donations. However, you should note that the amount of charitable donations you’re able to deduct is generally capped at 50% of your gross income.
IRS Rules for Donating Electronics
Electronics are very important when it comes to the donation of items of value to charities. Many charities accept a wide range of computer equipment as it allows them to be used in a multitude of educational environments and charitable causes.
Non-working Electronics – Will They Be Accepted?
The real answer here is, sometimes. This all depends on whether or not the charity will be able to find a use for it, and it depends on the charity’s policies. Schools could possibly use non-working electronics in labs to teach children valuable repair skills. If they’re not able to get any use out of it, then the charity will most likely dispose and recycle all non-viable equipment, and utilize a ‘’zero-landfill’’ procedure. This means that your electronic donation will be disassembled to its component level (circuit board, metal, glass, plastic), and it will be recycled and reused.
What Types of Electronic Donations Are Accepted?
The sky is truly the limit when it comes to the number of electronic donations you’re able to make.
Common charitable donations of electronics may include:
- 3D Printers
- Digital cameras
- VR Equipment (headsets etc)
- Medical electronics
- Video game consoles
- Desktop PC’s
- Car and boat electronics
Do you already have a couple of items on the list above that a charity can make use out of? If so, let’s find out the next step to take!
Charitable Donation – What You Have to Do
Fill out an online form or contact your charity of choice directly. Once this process is complete, it’s important to make sure that you keep track of everything donated.
Although nonprofits do issue you a receipt, it may not itemize all items on your donation. Therefore, it’s vital that you spread out all of your items and snap a few pictures. This will really help you when tax time comes around. Not only that, but it can also serve as additional documentation in the unlikely case you’re audited. However, you shouldn’t worry too much, donations like this are not usually a red flag for the IRS.
As mentioned earlier, remember to keep in mind that you will need a professional appraisal for every single item of value donated. This is especially important if a single donated item values at more than $500, or a group of donated items sums up to over $5,000. After photographs and any necessary documentation has been acquired, it should take you around 15 minutes to do all necessary calculations and fill out the tax information on Schedule A. If your total donation exceeds $500, you’ll also have to spend a few more minutes detailing it on form 8283 as well.
How the Charitable Use of an Item of Value Affects Your Tax Deduction
Your donation means a lot to charities, regardless of whether it’s an item of value or not. Different charities do different things with every donation given, however, we at Student Reach make sure to let all of our donors know exactly how their items are being used, and how it affects them.
For more details on what we do with your donation and how it affects the kind of tax deduction you’ll receive, see below:
What we do with your donation:
- We use it – We sometimes put donated items in service for our use. Vans, computers, and other such items might fit in this category.
- We give it away – Sometimes, people we serve need the items you donate. We might gift a car, a computer or clothing, for instance.
- We sell it to support our mission – Some items might be more useful to provide money for the services we provide, and some items are not practical for us to use at all. In that case, we try to get top market value for your donation.
What kind of tax deduction you will get:
IRS guidelines provide for you to get a fair market value tax deduction for the item you donate. While the FMV might be difficult to determine, the following 4 factors are useful.
- Cost or selling price – When an item is quickly sold, this is relatively easy to determine, if not, it is more complicated.
- Sales of comparable items – This is relatively simple with cars, real estate, and some other items, but more complex with many donations.
- Replacement cost – This can be used more easily with items that are not subject to rapid declines in price, like real estate, used vehicles, and other such items.
- Opinions of experts – professional appraisers or other experts can be useful for large ticket items.
Know Your Charity
Let’s face it, we all want our charitable donations to count. That’s why it’s so important we ask the right questions whenever we’re thinking of donating items of value. Make sure to always do your research, and know exactly how much of your donation goes to the program you’re actually looking to support. Do not donate anything until you’re sure that it will make a difference and go to the right place.
To help you out, here are some things that you can to make sure you do it right, and avoid donating to a fake charity:
- Do your research: Search Google for causes you care about like ‘’homeless children charities’’ or ‘’disaster relief’’. Once you find a cause that means something to you, search its name plus ‘’reviews’’, ‘’complaints’’, ‘’ratings’’, or ‘’scam’’. If anything comes up that seems like a red flag, go elsewhere.
- Take an in-depth look at the charity’s website: Does it give you valuable information? Is it completely clear about its mission or how it uses the donations given? If you can’t find detailed information, always be suspicious.
- Use online organizations: A bunch of websites are there to help out. Check out Charity Watch, Charity Navigator, BBB Wise Giving Alliance, or Guidestar (which StudentReach has a Gold Rating on).
Why you should donate to StudentReach:
We are not a for-profit middleman or third-party donation site – we are the actual non-profit.
We will use the proceeds to change peoples lives!
We work in:
- United States
- Baja, Mexico
- Zambia, Africa
- Nicaragua, Central America
What we do:
- Water Projects
- We mentor at-risk youth
- We work with schools to prevent exploitation, human trafficking and suicide
Taking a trip with StudentReach is way more than just traveling – it’s you being a hero to someone who desperately needs help.
We work with people living in absolute poverty.
What can you do to help? More than you think. You can be a hero.
Come on a trip with us today!
DONATIONS IN THE PAST HAVE HELPED: