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Make Your Benefit Ticket Make A Difference

It’s party time. Invitations and “save-the-dates” for this year’s charity events and benefits are on their way.

But how do you choose which ones to attend? In the past, my due diligence consisted of scanning the committee list to see if I recognized and liked the names. If I did, then I assumed it would be a fun party for a good cause.

This approach seemed to work just fine until a few weeks ago, when the host of a charity event leaned down and whispered in my ear “the party cost a lot more than we expected, so there wasn’t anything left to give away.” Huh? Fortunately I wasn’t counting on the tax deduction.

I realized that if I wanted fundraising events to be a real form of charitable giving and not just a mark on my social calendar then I ought to create a better process for picking which ones to attend. With the help of a philanthropy consultant, the executive of a non-profit and our cousins at The Wall Street Journal, I developed a simple five-step plan for becoming a more responsible and informed party-goer.

Please add your own steps in the comments.

1) Identify an area where you’d like to make a long-term difference. Friends-of-friends (and their committees) are likely to change more often than your passions are. “Choose a sector, or a geographical area, or a specific project that you can give to on an ongoing basis and start to see real change,” advises Heather Grizzle, a partner at ASG Advisors who helps corporations and individuals create charitable giving strategies.

“Starting that now will make it all the more rewarding when someday you can give $5,000 and $10,000 contributions instead of the $50 or $100 that you give now,” she adds.

2) Run a background check on your charity of choice. A Wall Street Journal article recently named a few web services that provide information on non-profits in the U.S. In some cases, these sites even provide a rating.
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Source: The Wall Street Journal

If the charity you’re researching isn’t included in these databases then you can always look at its 990 tax form. Many non-profits post these forms on their websites. If you don’t find them there, or on GuideStar, then you can ask the IRS to send it to you.

OK, admittedly the 990 is chock full of numbers and looks a bit overwhelming. Heather recommends doing this simple calculation: Compare the amount spent on grants and programs to the amount spent on administrative costs.

“You want to see that people are giving as much as possible to the cause, rather than paying office staff,” she says.

3) Figure out the tax-deductible amount of the ticket. A portion of most tickets covers event costs and is not tax- deductible. This amount is known as the “fair value.” The tax-deductible amount represents the percent of the ticket that went right into the non-profit’s coffers. Call the organization’s office and ask for this number if it’s not printed on the invitation or ticket.

4) Get a receipt. The IRS is getting strict about charitable deductions. You now need to file away a receipt for every donation you claim on your tax forms in case the IRS comes knocking on your door. The easiest way to get one is to buy your ticket with a credit card or check (keeping in mind that you can only claim the deductible amount of the ticket). If you have to pay cash at the door, ask the organization for a receipt.

Michael Danziger, the President of The Steppingstone Foundation in Boston, says that his organization usually sends attendees a letter citing the fair value of the benefit and the amount contributed.

5) Check your online profile the next day. You might not make Page Six, but there’s a good chance a silly picture could appear on Facebook, flickr or even your company’s intranet. Don’t let one little compromising pic of you going nuts on the dance floor embarrass you at the office the next day and overshadow all the work you put into choosing your cause, researching your charity, buying your ticket and dressing to the nines.

Then again, maybe you like that sort of thing.

– Kristen Sullivan