Charitable Giving in Kind: How to Donate without Spending a Dime

You want to make a difference by helping those less fortunate than yourself—but what can you do when your bank account balance is balking?

It’s easy to help your favorite charity while staying within budget. Instead of simply writing another check, try giving gifts in kind, such as goods for the charity’s use or sale, or even your own time and services. Here are three ways to give when you don't have a dollar to spare.

Donate an old car. If your high school-era Honda is still sitting in the driveway collecting rust, donating it to charity could be your best bet. For the most part, donating a used car is a win-win situation. The charity often enlists free labor to repair the car and sell it, while the contributor gets a tax deduction. However, that deduction isn’t as straightforward as it used to be. Since 2005, changes in tax law limit the deduction amounts, based on the claimed value of the vehicle and how it is used by the charity. According to the Internal Revenue Service (PDF), there is a $500 threshold on all donated vehicles. Limitations on higher deductions can be based on what the charity receives when it sells the vehicle. Thorough documentation will be required.

Despite these changes, donating a used car has other benefits for the giver. It’s usually easier to donate than to sell a used vehicle, especially if it is an older model or in poor condition. The organization picks up the car, saving towing costs if the vehicle isn’t running. However, the charity may be paying for that service, which will impact the benefit it gets from the donation. If the car is running, bring it in yourself to maximize the proceeds for the charity.

Not all groups that accept car donations are registered nonprofits. Often, they are for-profit intermediaries who keep a percentage of the car’s value for their efforts. If at all possible, deal directly with a charity known to you. As long as you’re giving to a 501 (c)(3), you’ll be entitled to a tax deduction. If you must deal with an intermediary, ask what percentage they withhold—and call the charity to confirm that.

Give away household goods and equipment. Numerous items around your house can benefit your favorite charity. The next time you upgrade your computer, remember that many nonprofits would be happy with your old one. Call your local school, youth group, or religious organization to find out who might be interested.

Many charities, such as Food For Lane County in Eugene, OR, depend on gifts of goods or property to forward their mission.

“We accept in-kind donations such as boxes for packing the food, as well as the food itself,” says Deb McGeorge, who solicits and coordinates donations for FFLC. “Of course, our greatest need is food. Over 52 percent of the food we distribute comes from donations,” McGeorge says. She adds that, even in tough economic times when people can’t buy extra groceries, the food bank will accept produce grown in personal gardens.

Look for surprising ways to donate, McGeorge suggests. “We’ve been given gas to help ease the cost of food transport, as well as the use of trucks or equipment,” she says.

Thrift stores, such as the ones run by Goodwill Industries, are always willing to accept used furniture, clothing, and other goods, as long as they’re usable. “If you wouldn’t allow guests to sit on your ragged, threadbare sofa, there’s little chance someone will buy it,” says Jim Clarke, manager of the Goodwill Thrift Store in Glassboro, NJ. Make sure your donation will benefit the charity, not just cause more work as they try to dispose of your trash.

Share your skills. The Habitat for Humanity Fresno County, CA, accepts gifts of used building materials, but more important than the used hammers, jigsaws, and two-by-fours are the people who donate their time and energy to the charity. “It takes 200 volunteers and a whole lot of money to get a family in a house,” says Joan Cook, the organization’s volunteer coordinator.

When volunteering, consider the organization’s mission statement to determine if you agree with its purpose. If you really believe in an organization’s goals, don’t hesitate to ask if they could use you. For example, most people associate volunteers at Habitat for Humanity with building trades, physical labor which may preclude some. However, Cook points out there are numerous “behind the scenes” opportunities to give your time – everything from serving on the Selection Committee, which screens housing applicants, helping with fund-raising, or baking with the Cookie Committee, which provides treats for those doing the building.

“There’s a place for everyone,” Cook says. “Just let us know what you can do and we’ll let you know where we can use you.”

Volunteer work in itself is not tax deductible. A standard deduction for mileage (or the actual cost of gas, if you keep records), parking fees and tolls necessary for charitable work is allowed. If you buy something for the charity’s use and aren’t reimbursed, you can deduct the purchase price. Also, if working for the charity requires wearing a uniform, you can deduct the cost of the item and its cleaning costs as well.

Of course, the biggest return for volunteering can’t be found on the bottom line. “It’s an intrinsic thing,” Cook says. “It’s really just a good feeling to know you helped someone you didn’t know. The families we house are just overwhelmed at the amount of people willing to help them. Relationships are built along with the house.

“The house may be the end product, but what happens during the building is the important part,” she adds.

By Mary Dixon Lebeau

Photo: Habitat for Humanity volunteers working on tsumani recovery efforts.