Now is great time for charitable giving

As we begin the last quarter of the year, we are about to enter the giving season. And I’m not talking about your friends and family. I’m talking about charitable donations.

According to some surveys, as much as 40 percent of an organization’s annual contributions occur in these last few months. Here are some things to think about with regards to giving:

Despite the improvement in the economy, the needs remain great. The Non-Profit Industry Study conducted by the Hawaii Community Foundation last year revealed that nearly 75 percent of organizations expect increased demands for services over the next two years. There are lots of people in Hawaii who are still struggling.

The improvement in the economy is influencing the generosity outlook of givers. A recent article in the Chronicle of Philanthropy cited the conclusions of a recent survey, saying: "For the first time since the economy hit its worst point five years ago, more than 80 percent of Americans now say that the financial crisis won’t affect their dona- tions." Good news, considering that charitable giving in Hawaii has remained relatively flat since 2000.

Also, the tax climate for giving has improved dramatically this year. With the passage of House Bill 430 by the Legislature and the governor, Hawaii taxpayers have no limitations on the amount of charitable contributions they can deduct from their state income tax. And relative stability around federal tax policy has allowed taxpayers to plan ahead on their giving strategies, including the IRA charitable rollover provision which allows for individuals 70½ and older to contribute directly to a qualified charity without paying income tax.

Tax planning is one reason why the "giving season" is so productive.

Many residents consult their professional advisers at this point in the year to determine the most effective means to give. For many, saving on taxes doesn’t motivate them to give or to whom they will give, but it maximizes the amount they can contribute to worthy causes.

The second reason for the giving season is that this is the time when people are asked. In previous surveys by the Hawaii Community Foundation, the No. 1 cited reason as to why someone gave to a particular charity is "because they were asked."

But nonprofit organizations need to be careful about solicitations. There is a growing dislike among donors about direct mail and telephone appeals with more than half, in the national survey mentioned above, saying they are more likely to stop giving to charities that bombard them with fundraising appeals.

More important, it is clear that donors are becoming increasingly selective about whom to support and are looking for strong evidence that an organization is achieving results and is well run. Nonprofits need to be able to measure and report to donors what results they are achieving in and for the community.

So for everyone involved with organizations, as staff members or volunteers, the next few months should be a great opportunity. And for everyone who will be asked to give, remember that our community could really use your support. Indeed, if Hawaii households gave just one-half of 1 percent more of their income to charity, it would provide an additional $160 million for Hawaii nonprofits and the people they serve.