How to Know Which Charitable Organizations Qualify for Tax-Deductible Donations

Tax-deductible donations to charitable organizations as part of a planned giving program are a great way to minimize taxes and control how your money is used. However, the organizations you donate to must be chosen carefully.

Not every non-profit or tax-exempt organization is qualified by the IRS to receive tax-deductible donations. Inadvertently making donations to the wrong organization can cause serious problems with your planned giving program, especially if you are giving through a trust or foundation.

The problem is not so much with large national and well-known charities, like The United Way or the American Cancer Society, but often with smaller organizations or local groups. Especially, organizations that represent political positions or have a strong lobbying component need to be looked at closely before making a donation.

In Dayton, Ohio the attorneys at Gudorf Law Group maintain a list of recommended charitable foundations in Ohio that work well with a variety of charitable giving strategies and meet a wide variety of philanthropic interests for our clients. We also work with clients to do due diligence to ensure the tax-deductible donation status of charitable organizations they are interested in. When making decisions about charitable donations, it’s best to work with an attorney who is familiar with charitable giving law and offers similar services.

Charitable Organizations Must Have 501(c)(3) or Similar IRS Designation

Generally speaking, most organizations with a 501(c)(3) designation from the Internal Revenue Service qualify for tax-deductible donations and may be used with your planned giving program. Groups in this classification include those whose purpose is charitable, religious, scientific, educational or literary in nature. It also includes those involved in preventing cruelty to children or animals or that foster national or international amateur sports competition. However, it also includes groups who do testing for public safety, and donations to these organizations are not tax deductible.

There are also a few other IRS designations that indicate charitable organizations qualifying for tax-deductible donations, such as the 501(c)(19) designation for veterans’ organizations. Others include 501(c)(4) and 501(c)(6). However, you must watch these carefully as there are often special rules that must apply. For example, 90% of the members of a 501(c)(19) group must be veterans in order to qualify for tax-deductible donations.

The best way to ensure your donation will be tax-deductible and qualify for your planned giving program is to have a qualified attorney perform due diligence like the Dayton, Ohio attorneys at Gudorf Law Group do. While this may add to the cost of establishing your program, it is far less than the costs you will incur by making a large donation to the wrong sort of organization.

On your own, you can do the following to identify potential charitable organizations for your charitable giving strategy:

  1. Ask the group to confirm donations they receive are tax deductible
  2. Verify the organization’s status using the IRS Exempt Organizations Select Check tool online
  3. If the organization is not found using the IRS Exempt Organizations Select Check took, you can call IRS customer service at 877-829-5500 and ask about the organization’s status

Get more help finding charitable organizations for your planned giving program

In Dayton, Ohio, attorneys at Gudorf Law Group, LLC, can help you find qualified charities that meet your planned giving needs, including charitable foundations. Our Ohio attorneys are available for a free initial consultation by calling 1-877-483-6730.