Many organizations rely on external funding to continue operations. These services typically exist to assist others, though the specifics may be unique to certain geographic areas, cultural hotspots or other topical issues. Donating to a nonprofit has numerous advantages, not only for the nonprofit but for the giver as well.
Here are some of the good things that may happen when you donate to a nonprofit, including potential tax benefits and the impact that a single donation can have on a cause.
What Being a Nonprofit Means
A nonprofit is an institution or entity that operates without profit in order to provide a collective benefit to the public. This is different from a business, which strives to create a profit that compensates its employees and shareholders.
Any organization must complete rigorous governmental requirements in order to be considered a nonprofit; in this way, businesses cannot simply claim to be nonprofits in order to improve their image or change the way their taxes are done.
Even if a business provides social benefits, to qualify as a nonprofit, it cannot generate a profit such that any individual in the business is entitled to collect it. Nonprofits may earn income, but the funds must be used for the further operation and expansion of the nonprofit itself, not for the benefit of shareholders or owners.
Why Donate to a Nonprofit?
Nonprofits and charities are frequently vying for people’s attention to their causes – whether volunteers with clipboards approach potential supporters in public , or use advertisements. This makes many people consider whether donation is worth it.
On the one hand, individuals must look out for their own financial wellness, but on the other hand, giving can have an important impact for a charity. While you should only donate to nonprofits if you are financially stable and have the ability to do so, giving even a small amount can do amazing things.
Support an Important Cause
Most notably, donating to a nonprofit supports often-critical efforts in worthwhile areas. The money given by donors and sponsors is essential for a nonprofit to operate so that it can continue to perform the services it provides for its community.
This could be offering food to food-insecure households, rescuing feral animals or any of a wide variety of other important tasks. Because nonprofits do not function the same way as businesses, they rely on donations as their source of income, which must then be utilized to cover monetary costs of expenses, such as rent for the building, supplies, equipment and utility bills.
Make Resources Available
An expansion of generalized support for the cause, donations can also help nonprofits continue their outreach or expand their services. This is true for organizations that provide services such as senior citizen transport. Donations can help these nonprofits become stable enough that they may offer critical resources and information to people in need.
Receive a Tax Deduction
Donating to nonprofits is useful for the nonprofit itself, of course, but it also offers benefits for the donor. As long as an entity is registered correctly as a nonprofit, donations made to that organization are tax deductible.
This means that when it is time to complete your tax forms, you can note those donations and receive a deduction that lowers your overall tax burden due to the donations given. Make sure to keep receipts or bank statements showing evidence of the donations in case the IRS requests proof.
Another advantage of donating to a nonprofit is expanding social awareness of the program. Whether donors talk about their activities with people who have never heard about the nonprofit before or their donation increases the reach and presence of the organization, monetary contributions help nonprofits get people’s attention. The more people know, the more people can help!
Improve Your Own Health
Studies have shown that the act of charitable giving has health benefits for the people who give. Sometimes referred to as a “helper’s high,” the act provides a boost of important chemical markers such as serotonin and endorphins in the limbic system, which can help combat depression and anxiety. Some studies even indicate that those who give frequently live longer and have lower blood pressure than those who do not.
Donate to Important Causes Near You
If you are considering donating to a cause near you, nonprofits could always use your generosity. The Shepherd’s Center of Northern Virginia is a registered nonprofit organization that offers support and services to elders and their families to help them live productive and full lives for as long as possible.
Contact us to learn more about the important services that we offer to our community or to donate to support our mission.