Charitable Giving- Public Charities and Giving Options

When many individuals and families consider giving to charity they typically are considering public charities.   If you are considering making a donation to a charity you feel passionately about there are a few things to know before making a contribution and be sure to evaluate your giving options.


It’s important to understand the difference between public and private charities.  Charities are divided into two types: public and private.  Their classification is dependent on their purpose, operations and the manner they receive and payout donations.


Private foundations are generally funded by a wealthy donor or family and typically pay family members to operate the foundation.  These foundations are required to pay out at least 5% as donations through grants and the costs for establishment and operating may be high.


Public charities, which are more familiar, are funded by many donors (individuals, government funding and private charities’ grants) and through many differing values of donations. 


Public and Private charities are set up as “non-profit organizations” or “501 (C )(3) organizations and receive “tax-exempt status” from the IRS under code 501 (C )(3).  Charities receive and keep their tax-exempt status by filing required documents annually with the IRS showing that their profits are used for “exempt purposes”.  

This is important to know because if you are considering making a contribution to a charity you will want to be sure the charity qualifies for exempt tax status so that you can take a deduction for a portion of your donation.


Since, the organization must filed annually with the IRS to maintain their tax exempt status, they will have a 501 (C) 3 determination letter stating that they qualify for tax exempt status. 


Before making a contribution, ask the charity for a copy of their letter to retain for your records.   They will happily provide you a copy.  Also, they should send you a receipt after you make a donation showing the amount of your contribution. 


Prior to making a contribution evaluate the type of donation (cash or property) you would like to make to a particular charity type. It is always a good idea to speak with your tax consultant or CPA prior to making a decision.  They will help you to fully evaluate your donation and which method makes the most sense base on your situation.


Your donation can be made in cash or property and the type you choose to give will determine the amount you can deduct on your taxes.


Donations made in cash to public charities are deductible for up to 50% of your adjusted gross income (AGI), while gifts made in property are deductible up to 30% of the donor’s adjusted income. 


So giving to public charities is great.  You are helping that organization meet it’s mission through the services provided and you feel good that you are giving back and helping to make some type of positive impact in our society. 


Usually, there are enough public charities that will appeal to you. 

However, if you feel a public charity is too big or you would like your contribution to support a particular community, there are community foundations that you can donate to as well.  These community foundations while smaller than most public foundations are still taxed as a public charity. 


However, if you are considering making a contribution to a foreign charitable organization your donation will most likely not be tax deductible. 


If you are unsure about the classification of a charity, ask questions prior to making your contribution.


By understanding the nature of the charitable organization you want to donate to and evaluating the method of your contribution you can more effectively plan your next charitable donation.  Happy giving.

Heather Castle

I am originally from Virginia and grew up in Tuscaloosa, Al.  I completed both of my degrees at the University of Alabama.  My undergrad degree in Finance and then later my MBA from the Manderson Business School through their Executive MBA program. 

I started Castle Wealth Advisors, LLC because I wanted to provide ethical and approachable financial planning and investment management to individuals and business owners, concerned with their financial futures, regardless of age, sex, race, or net worth.

I've always believed clients should work with reputable, qualified, and experienced advisors.  So it was important to me to gain industry experience as well as pursuing additional industry specific designations.  I have passed the following licensing exams:

     Series 7, General Securities Representative

     Series 66, Investment Advisor Representative 

     Series 9 & 10, General Securities Sales Supervisor

     California Life, Health, and Variable Insurance (License #0K01554)

I have been in the financial services industry since 2006 and have work with many differing type of clients over the years.  One thing I know to be true, everyone wants to feel heard and cared about.  Meaning everyone I have ever worked with wants to feel like their desires, wants and needs have been heard and taken into consideration when speaking about their personal financial matters.

Many people have the same goals, they just express them differently, and then there are a few who’s view and desires are completely different.  This is one of the aspects I love about my job.  The PEOPLE!  I get to meet some many interesting people and they challenge me daily.  No day in my line of work is the same.  Today I could be planning for a family who owns a small business and tomorrow working with a women going through a painful divorce.  Listening and building financial plans and strategies around personal needs is why many of my clients have said they do business with me and have stayed with me. 

Another reason I love my job… I get to truly HELP people.  I get to make a living and provide for my family while helping others.  Over my career I have felt a need to dive deeper into financial planning and working with high net worth individuals who have greater planning and investing needs.  Listed below I have highlighted a few of the areas I specialize in:

·      Women in transition (divorce/ death)

·      Corporate Executives

·      Young Entrepreneurs

·      Small Business Owners

·      Family with Special Needs Members

·      Complex Retirement and Estate Planning Needs

Currently I live in Brentwood and really enjoy the West Side of Los Angeles.  I am actively involved with the Junior League of Los Angeles.  I have a passion for trying new things and new experiences.  So, in my free time I love traveling and scuba diving.  I also am interested in learning French, taking pilot’s lessons and dancing the tango!