A donation is a gift for charity, humanitarian aid, or to benefit a cause. A donation may take various forms, including money, alms, services, or goods such as clothing, toys, food, or vehicles. A donation may satisfy medical needs such as blood or organs for transplant.
Charitable donations of goods or services are also called gifts in kind . [1]
In the United States, in 2007, the Bureau of Labor Statistics found that American households in the lowest fifth in terms of wealth, gave on average a higher percentage of their incomes to charitable organizations than those households in the highest fifth. [2] Charity Navigator writes that, according to Giving USA, Americans gave $298 billion in 2011 (about 2% of GDP). [3] The majority of donations were from individuals (73%), then from bequests (about 12%), foundations (2%) and less than 1% from corporations. The largest sector to receive donations was religious organizations (32%), then education (13%). Giving has increased in 3 out of 4 years since 1971 (with the occasional declines occurring around recession years). [3]
Blackbaud reports that, in the US, online giving in 2012 grew by 11% on a year-over-year basis. The percentage of total fundraising that comes from online giving was about 7% in 2012. This was an increase from 6% in 2011 and is nearing the record level of 8% from 2010 when online giving spiked in response to Haitian earthquake relief efforts. Steve MacLaughlin notes in the report that "the Internet has now become the first-response channel of choice for donors during disasters and other emergency events." [4]
Blackbaud's 2015 Charitable Giving report revealed a 9% increase in online donations compared to 2014. In addition, online giving represented 7% of overall fundraising, with 14% of all online donations made on mobile devices. Donations made on the international online giving day #GivingTuesday were up 52% from the previous year. [5]
In Australia, donation statistics are made available annually by the Australian Taxation Office (ATO), in the form of detailed tables breaking down the items in the individual tax return by gender, age, income, and state/territory. In Australia, individuals submit an income tax return based on their personal income levels and source(s). Unlike in other Western jurisdictions, income tax returns cannot be submitted as a couple or household, and standard deductions are not available for donations.
The most recent year of available data is 2021–2022. Analysis of the ATO data showed that the total amount donated and claimed as tax-deductible donations in 2021–22 was $4.55 billion (compared to $4.39 billion for the previous income year). This constitutes an increase of 3.66 per cent or $160.58 million. The average tax-deductible donation made to DGRs and claimed by Australian taxpayers in 2021–22 was $1,067.17 (compared to $1,047.27 in the previous income year). This is a slight increase of 1.90 per cent. [6]
The ATO data in no way represents all gifts, being limited to giving by individual taxpayers to DGRs. Furthermore, not all gifts will be claimed, either due to forgetfulness or a conscious decision not to claim. Broadly speaking, those whose income is derived from their superannuation (personal retirement savings) are not required to pay tax or submit a return, so their gifts are not included. Additionally, the data does not include giving from trusts or companies or giving by persons overseas who are not Australian taxpayers. The ATO dataset also does not examine other forms of giving such as time (volunteering) or goods under $5,000 in value.
Donations are given without return consideration. This lack of return consideration means that, in common law, an agreement to make a donation is an "imperfect contract void for want of consideration." [7] Only when the donation is made does it acquire legal status as a transfer or property. [8]
In politics, the law of some countries may prohibit or restrict the extent to which politicians may accept gifts or donations of large sums of money, especially from business or lobby groups (see campaign finance). Donations of money or property to qualifying charitable organizations are also usually tax deductible. Because this reduces the state's tax income, calls have been raised that the state (and the public in general) should pay more attention towards ensuring that charities use this 'tax money' in suitable ways.
There have been discussions on whether also a donation of time should be tax deductible. [9]
The person or institution giving a gift is called the donor, and the person or institution getting the gift is called the donee. [8]
It is possible to donate in the name of a third party, making a gift in honor or memory of someone or something. Gifts in honor or memory of a third party are made for various reasons, such as holiday gifts, wedding gifts, in memory of somebody who has died, in memory of pets or in the name of groups or associations that no longer exist. Memorial gifts are sometimes requested by their survivors (e.g. "in lieu of flowers, contributions may be made to ABC Charity"), usually directing donations to a charitable organization for which the deceased was a donor or volunteer, or for a cause befitting the deceased's priorities in life or manner of death. Memorial donations are also sometimes given by people unable to attend the ceremony.
There are also circumstances when people like to donate funds to their preferred causes by not revealing their names. Many donors such as public figures or philanthropists like to stay anonymous while making generous donations for various reasons such as to not be asked for money from other organisations or their religious beliefs. [10] Many donors like to stay anonymous because of their religious beliefs or simply don't want any notoriety from giving.
A nonprofit organization (NPO), also known as a nonbusiness entity, nonprofit institution, or simply a nonprofit, is a legal entity organized and operated for a collective, public or social benefit, as opposed to an entity that operates as a business aiming to generate a profit for its owners. A nonprofit organization is subject to the non-distribution constraint: any revenues that exceed expenses must be committed to the organization's purpose, not taken by private parties. Depending on the local laws, charities are regularly organized as non-profits. A host of organizations may be nonprofit, including some political organizations, schools, hospitals, business associations, churches, foundations, social clubs, and consumer cooperatives. Nonprofit entities may seek approval from governments to be tax-exempt, and some may also qualify to receive tax-deductible contributions, but an entity may incorporate as a nonprofit entity without having tax-exempt status.
Charitable contribution deductions for United States Federal Income Tax purposes are defined in section 170(c) of the Internal Revenue Code as contributions to or for the use of certain nonprofit enterprises.
Car donation is the practice of giving away unwanted used automobiles or other vehicles to charitable organizations. In the United States, these donations can provide a tax benefit to the donor.
Fundraising or fund-raising is the process of seeking and gathering voluntary financial contributions by engaging individuals, businesses, charitable foundations, or governmental agencies. Although fundraising typically refers to efforts to gather money for non-profit organizations, it is sometimes used to refer to the identification and solicitation of investors or other sources of capital for for-profit enterprises.
A charitable organization or charity is an organization whose primary objectives are philanthropy and social well-being.
A gift tax, known originally as inheritance tax, is a tax imposed on the transfer of ownership of property during the giver's life. The United States Internal Revenue Service says that a gift is "Any transfer to an individual, either directly or indirectly, where full compensation is not received in return."
Gift Aid is a UK tax incentive that enables tax-effective giving by individuals to charities in the United Kingdom. Gift Aid was introduced in the Finance Act 1990 for donations given after 1 October 1990, but was originally limited to cash gifts of £600 or more. This threshold was successively reduced in April 2000 when the policy was substantially revised and the minimum donation limit removed entirely. A similar policy applies to charitable donations by companies that are subject to the UK corporation tax.
In the United States, a donor-advised fund is a charitable giving vehicle administered by a public charity created to manage charitable donations on behalf of organizations, families, or individuals. To participate in a donor-advised fund, a donating individual or organization opens an account in the fund and deposits cash, securities, or other financial instruments. They surrender ownership of anything they put in the fund but retain advisory privileges over how their account is invested, and how it distributes money to charities.
The Charities Aid Foundation (CAF) is a registered UK charity that operates in the United Kingdom, the United States of America and Canada. It works with companies, private philanthropists, regular donors, fellow foundations, governments, charities and not-for-profit enterprises to enable them to give more. Its stated purpose is to “accelerate progress in society towards a fair and sustainable future for all.”
A 501(c)(3) organization is a United States corporation, trust, unincorporated association or other type of organization exempt from federal income tax under section 501(c)(3) of Title 26 of the United States Code. It is one of the 29 types of 501(c) nonprofit organizations in the US.
A donor managed investment account is a charitable giving mechanism in which donors receive a full tax deduction at the time they fund the DMI account, but retain investment management rights over the account, and can request donations from the account to charities.
A foundation in the United States is a type of charitable organization. Though, the Internal Revenue Code distinguishes between private foundations and public charities. Private foundations have more restrictions and fewer tax benefits than public charities like community foundations.
Payroll Giving, Workplace Giving or Give As You Earn (GAYE) is a scheme for UK taxpayers to donate money to UK Registered Charities.
Form 990 is a United States Internal Revenue Service (IRS) form that provides the public with information about a nonprofit organization. It is also used by government agencies to prevent organizations from abusing their tax-exempt status. Some nonprofits, such as hospitals and other healthcare organizations, have more comprehensive reporting requirements.
National Philanthropic Trust (NPT) is an American independent public charity that provides philanthropic expertise to donors, foundations and financial institutions. NPT ranks among the largest grantmaking institutions in the United States.
A charitable organization in Canada is regulated under the Canadian Income Tax Act through the Charities Directorate of the Canada Revenue Agency (CRA).
Volunteer grants are charitable gifts given to non-profit organizations by corporations in recognition of volunteer work being done by a company's employees. This practice is widespread in the United States.
GivingTuesday, often stylized as #GivingTuesday for the purposes of hashtag activism, is the Tuesday after Thanksgiving in the United States. It is touted as a "global generosity movement unleashing the power of people and organizations to transform their communities and the world". An organization of the same name is an independent 501(c)(3) nonprofit that supports the global movement.
BT MyDonate was a not-for-profit online fundraising service provided by United Kingdom telecommunications company BT Group for charities in the UK, and was launched on 6 April 2011 as part of BT's investment to the community. It closed on 30 June 2019 so BT can focus its support in other areas including how they'll continue to support charities, and due to the many alternative fundraising platforms available, including several fee-free offers, to the UK.
A flow-through share' (FTS) is a Canadian tax-based financing incentive that is available to, among others, the mining sector. A FTS is a type of share issued by a corporation to a taxpayer, pursuant to an agreement with the corporation under which the issuing corporation agrees to incur eligible exploration expenses in an amount up to the consideration paid by the taxpayer for the shares.
Herbermann, Charles, ed. (1913). "Donation". Catholic Encyclopedia . New York: Robert Appleton Company.