Donating large sums to charity

[JustJason]

I commented about it on an earlier post, but but if you didn't see it you wouldn't know. I got some scratch tickets in my xmass stocking. I hit for 100k on a $5 ticket. I'm heading down tomorrow to the lottery agent, but my best guess is i'll see about 72%, or $72,000 of it.

So far I've decided to:

1. all the gifts the family gave to everyone is now "on santa" this year.
2. I'm going to take Kate someplace nice. We've been together 3 years and we haven't taken a vacation yet. I'm not talking a Hawaii nice vaca.... but a mom and pop B&B followed by some skiing will do her and I just fine.
3. Although i've had my eye on the Snap-On war wagon tool chest for years..... I'm going to buy my Dad the best bottle of blended scotch I can find. It's funny because I got him a bottle of Chivas 18 year for xmass... And he tells me "it's to much". I would like to find a bottle in the 3-5K range for him. Something mid 1800's or earlier. He deserves it, and I could use recomendations on that as well!!
4. I do need a couple of tools for myself. Some scanners and other diagnostic tools. I figure 2 to 3K i'll keep and spend on myself.
5. Easy come..... easy go.... The last 50K or 60K of it will all go to charity.


I just need to start figureing out what charities are good and which one are scams. I also need to scheme with a CPA so I can donate the maximum without getting whacked in taxes later on. I don't know what happens when you write a check for 60 grand. Are the initial taxes on the winnings all you pay for that tax year? or are there hidden things?
Has anybody here donated a larger amount to a charity? If so which one and why? Or did you keep the money and do something charitable with it? Even if it was passing out 100 bucks at a time to someone that "looked" in need.

My biggest issue is this. I know that charities have to donate a certain percentage of donations to the actual cause, but that amount, percentage wise, is very small. Im some instances under 10%.

I would hate to donate 60K to someplace only to find out that 6 grand went "towards the cause" and the other 54K gets wrapped up in administrative costs and salaries. I know charities cost money to run, but I'm needing some direction as to the better ones.

Where and to what? I hope this doesn't stir up a debate so bad the thread gets locked. I want to do something good. But I don't know where to start.

I don't know how many of you saw the "Penney and Mike" thread I posted a while back. Penney was Kates best friend and a nurse in oncology for cancer kids before she met her untimely death. She cared for cancer kids. Make a Wish foundation looks like a great cause, but I don't know how it exactly works. Again, I'd hate to give 60K if all I get out of it is 1 cancer kid that gets to go to Disney land. If I could send 60 cancer kids for 60K I'd just feel alot better about the donation. I don't necessarily feel the need to know where every nickle and dime goes, as long as I feel like most of the money went to good use, I'd be happy.

Anybody have any insight, ideas, or personal experience?

 

[i386]

Re: Donating large sums to charity

Congrats and good on you for being so charitable. I say if you really want to see where your money is going, do something local. I'm sure it can be done anonymously if you don't want the attention.

 

[kei9th]

Re: Donating large sums to charity

justjason that is a awesome gift on Christmas. are you sure you wont get only a third of the total winnings? that is how the lump sum in the lotto is done. you are a better person than i cause there is no way im giving any money to charity. if you really want to make a difference with your money give 10,000 cash to someone you know that it will change their life. not just give money to anyone but someone who knows the value of money and would not spend it frivolously. i know two people that $10,000 could considerably change their life. i personally dont think enough of donated money goes to the cause. enjoy your winnings.

 

[Gary H NC]

Re: Donating large sums to charity

Man Jason! That was great luck!

Do you have children or are planning to?
I think saving it for education would be the way to go.
Think of your and Kate's future.Pay off the house or something like that to be sure it goes to good use.
With the economy the way it is i would invest it in myself.

I know the charity is a great idea too but not all of it goes to people really in need.
70k will go faster than you think.

 

[Summer Fun]

Re: Donating large sums to charity

Good for you Jason !! . Did you take a pic of the winning ticket??.

 

[Bass Tracker TX17]

Re: Donating large sums to charity

Man Jason! That was great luck!

Do you have children or are planning to?
I think saving it for education would be the way to go.
Think of your and Kate's future.Pay off the house or something like that to be sure it goes to good use.
With the economy the way it is i would invest it in myself.

I know the charity is a great idea too but not all of it goes to people really in need.
70k will go faster than you think.

congrats but i agree with the above.

It only takes one accident or bad luck to put you in a very bad way.

And in this day and age the sharks are looking for your money as a result.

Donating 5 grand would be a very nice gesture and keeping the rest for a rainy day is much wiser.

A applaud your reasoning and your heart but like others have said 70 grand don't put you on easy street. your future can be made easier with this and later you can help others in stages if you feel the desire to. Interest will help grow this nest a little at a time. maybe donating the interest yearly to many useful local causes will be a way to go. life changes daily and you cannot for see the future.. Good luck ......

 

[marlboro180]

Re: Donating large sums to charity

Wow, that is really great to hear in these times- some good news. I am sure if you take your idea to your CPA they will have a good idea as to what the tax implications are.

We had some good fortune in the past, not from the lottery but from a family members estate. The taxes/investing/donating was a bit cumbersome, but it felt just wonderful to give away a considerable amount.

We started looking around for charities and gave to one that had been a considerable help to my fathers childhood illness. Meant a lot to us and to him to give back as a family thank you. Gave some to a local charity that my grandmother had been instrumental in founding. We tried to make sure that these organizations had not become top heavy through the years, wrought with administrative costs and the like. I like to think that we helped someone in some way.
Guess what I am getting at is that do what is right in your heart, give to one that has some meaning to you.Sounds like you have a big decision

My favorite was the beginnings of a college fund for our kid, trust funds for our godchildren , and the same for a couple children of our good friends who were desperately trying to get a leg up on their financial ( or lack thereof) life.

The charities will welcome you with open arms!

 

[LadyFish]

Re: Donating large sums to charity

If you do decide to give to a charity be sure to specify in writing your intentions so it is earmarked specifically. Otherwise the money will be used for operations, which is fine too but may not be your intended gift.

Here's an example:
This donation is so that "BLANK CHILDREN'S CENTER" can purchase 2 new Windows Vista and Microsoft Office 2007 ready computers and accessories along with 2 printers. These computers shall be placed in a common area and utilized by children only.

It all depends on your intentions but its always better to state specifics if you are worried about where your money is being spent.

 

[MRS]

Re: Donating large sums to charity

You, just made my year what ever you decided I hope you and yours have a Great New year. Just when I wonder about people and why they do the things they do to other people someone like you pops up and makes me .....

 

[4JawChuck]

Re: Donating large sums to charity

A friend of mines father passed away and requested in his will that a large donation be given to the cancer foundation, he left a substancial pile of cash so my buddy did some research into how much to give etc. but I already knew how the money would be spent since a friend had done this research before.

We visited the Foundation and went to the "Research Centre", 7 floors devoted to administration..1 floor devoted to research and treatment, he found out less than 1% gets spent on research...he was sickened.

In the end he put the money in the bank and carries a couple hundred dollar bills in his wallet for those occasions when he finds someone in need, I can tell you he gets far more enjoyment and satisfaction giving out those bills when the situation warrants then any mass donation could have.

This Christmas we went shopping together to buy gifts for the wives and he paid for the lady single parents gifts two people behind us as we stood in line, she never knew until she got to the counter and we waited outside to see the look on her face. Absolutely priceless, she was in tears and obviously very thankful without ever knowing who he was.

He calls it "Guerilla giving" and I can tell you he is a changed person for it, I enjoy just being around when he does it. One time we were at a local hospital to see his mom and there was a young boy checking the phone return slots for quarters...I recognized the boy as the son of a couple whose daughter was in the childrens ward down the hall from his Mom. I mentioned the story of this young boy to him and he ran over to one of the phones and slipped a hundred in the return slot and sat back down just close enough so we could make sure the boy got the money.

That little boy couldn't believe his luck and we followed him to the lost and found counter where he was going to return the money! It took some quick thinking but he got the attention of the lady at the other side of the counter and told him what he was up to. The lady told the little boy they couldn't take cash as it was against their rules and he should consider himself lucky.

That little boy went straight to the gift shop, bought the biggest pink teddy bear they had and a bag of skittles for himself and must have bounced three steps with every stride as he went back to his sisters room were his parents were.

I'm telling you, it nearly broke my heart with joy to be a witness to it all...still makes my eyes tear up to retell it. Don't you dare give that money to a faceless corporation who will waste it, you go out there and do some guerilla giving on your own, pay it forward in person. He says it's his duty to do it this way as his Dad would have been angry if he wasted his hard earned money.

Hope you take my advice and take time out of your life to pay it forward in a very personal way...take a friend to share the experience and have fun doing it. This Saturday he asked if I would mind if he borrowed my van so he could go on a mission, his latest guerilla target was an old folks home...he dropped off a load of beer for the residents. I not only said yes but I wanted to come along to hear him give the nurses some fake story about how hes just the delivery driver and drop off and run.

By far the most fun I have ever had, sure makes me enjoy life more and realize how lucky I am to know him. Its a blast just thinking up new missions to send him on, if you folks have some ideas please post them.

The best way to spend a Saturday afternoon I know of.

 

[DECK SWABBER 58]

Re: Donating large sums to charity

I think most charities/non for profit organizations are required
by law to show what percentage goes where.

Local is always good. I like the Salvation Army, they seem efficient
in how the money is used.
This Christmas I donated to them, a local homeless shelter, a non for
profit animal shelter and a non-denominational religious organization.

 

[BeaufortTJustice]

Re: Donating large sums to charity

Congratulations on your luck! If you ultimately decide to donate that large of a sum of money, definitely consult with a tax professional. I'd hate to see you donate 60k and have a extra 10k tax liability on top of the tax withheld by the lottery commission.

Don't know if your state is the same, but here in SC the Secretary of State's office releases an annual "angels and scrooges" list that details the best and worst charities as far as % of donated money actually going towards cause vs. operations. They publish it December every year, but it covers the entire year. Might be worth a glance.

Another consideration is setting up a scholarship fund or other "trust" (not sure on exact name) type fund that invests the money and uses the interest/dividends to fund a $1000 or $2000 /year scholarship. You would be able to set it up in honor of anyone you choose and you can set the eligibility criteria. For example, one of my state professional assoc. has one for our children who are HS seniors and college bound. Every year they publish a topic and every student applicant must write an essay on the topic. The executive board of the assoc. votes on the best essay and awards the scholarship accordingly. Just an option you may not have considered. Good way to leave a legacy for you or in someone's memory.

 

[roscoe]

Re: Donating large sums to charity

I saw the earlier post about the winning ticket, but just wasn't sure if you meant it, given the context of the original post.

Congrats.

My advice on charities, keep it local if you can.
Churches, scouts, eldercare, hospitals, etc.
Only go "national" if its a particularly special charity that means something to you.

Here is an interesting charity, read the articles before jumping to conclusions.

http://www.americanprofile.com/article/4870.html


http://www.americanprofile.com/article/4880.html


http://www.americanprofile.com/article/4881.html

 

[JustJason]

Re: Donating large sums to charity

Picked up and deposited the check today. 68K and some change.

Also talked to my neighbor who is a corporate CPA, and told him my plans. He said if I want to maximize any sort of donation is to not touch much of it until the tax season is over. He recomended to put it into CD's or low risk investment and file for a six month extension on my taxes. He said that will give time for CD's to mature, or for investments to earn a little money between now and next october. He said when I'm ready he'd sit down with me and help me do my taxes for this year, but plan on planning to do them in Sept.

All your ideas have been great so far guys and have given me some food for thought. Please keep them coming.

 

[lowkee]

Re: Donating large sums to charity

I have the same concern with charities sucking up a good portion of money just for the privilege to help people. With that said, why pay retail for charity when you do everything else wholesale? Keep enough to cover taxes and simply give money to whoever you find in need of it. It seems a bit silly to hire someone to give money away. I'm sure all of us know at least one or two people who could really use a month of their mortgage paid for or a cheap, reliable car to replace their clunker. I think your money would go MUCH further if you distribute it without the 'middle man'. Charities are good for people who have millions to distribute and no time to do it on their own. Your amount is easily distributed on a case by case basis, and the labor, as with our boat repair, is free.

As with most things in life.. Think globally, act locally.

PS: Rock on with the good luck! What an amazing stroke of luck. When people get so lucky, isn't it customary to advise them to buy a lottery ticket.. vicious circle ensues?

 

[JustJason]

Re: Donating large sums to charity

It's so hard to decide. I lost both of my grandmothers years ago. 1 of them I knew, who died of severe diabetes complicated with obesity. The other who I knew, but she didn't know me, died of alzhiemers (sp?). Both terrible sicknesess.

It is my most tremendous christmas wish that I had won 100 million instead. And with that 100 million I woud pick just 1 sickness, and take your pick. Diabetes, Aids, types of cancer... etc. I would hire the 10 best medical minds I could find and equip them and say here's a 100 million in escrow for all of you, fix this illness and you get it all.

I don't care about the money much, I'm 32 and still have plenty of time to make some. I care more about the folks who physically cannot.

I'm a hard azz sometimes. Years ago my mom's dad died. He was an a-hole, but a rich millionaire a-hole. I watched my mom and her 2 brothers, as well as 11 other cousins (plus me which would make 12 grandkids) fight over his estate. Late in his life he decided to split his estate up, gifting each child 10K a year (limit at the time I think) and gifting each grandchild 10K, which was to be gifted back to the parent. It basically was a way to distribute more money equally to the 3 children by gifting to grandkids and funneling by re-gifting back to the 3. The problem was, is that I had no relationship with my grandfather on my moms side. He was a dink. My parents tried to get me to "sign some legal doc's" when I was 15. I asked to many questions. I figured it all out. And I wanted no part of it. Because I wouldn't play along the math got all screwed up. Gifting 11 grandkids 10 grand, which was to be re-gifted didn't work out as neatly as the 12 grandkids re-gifting divided by 3 parents math would like it to be.
I watched people fight.
My later teen years suffered because of it.
Believe me it was difficult.

Please guys don't congrats me. I'm taking care of my fam's expenses for the holiday, buying a few gifts for the most special people in my life, and keeping a few grand for a few non-luxury items I need... AKA tools that I can make money with.

Like I said before, I don't need any kind of personal gratification. Although handing out 100's to people who seem to be in need I think I would like to do for the experience of it.

Please keep your ideas and storied pouring in guys and gals.

 

[salty87]

Re: Donating large sums to charity

food banks are really hurting nowadays, also a way to keep it mostly local.

my father in law is a social worker in the foster child system. he works for children's homes where the kids stay until a more permanent home can be found. they have also lost lots of funding over the past 2 years. these places have very specific needs and will take donations of computers or whatever else they need if you don't want to hand over cash.

just a couple of thoughts for you. good luck. i've never come into a large sum like that, i'd like to think i'd be as generous.

 

[bkwapisz]

Re: Donating large sums to charity

food banks are really hurting nowadays, also a way to keep it mostly local.

my father in law is a social worker in the foster child system. he works for children's homes where the kids stay until a more permanent home can be found. they have also lost lots of funding over the past 2 years. these places have very specific needs and will take donations of computers or whatever else they need if you don't want to hand over cash.

just a couple of thoughts for you. good luck. i've never come into a large sum like that, i'd like to think i'd be as generous.

I second the Food Pantry idea. We have a local one here in Northern Mich and they're always very thankful for donations. They put 100% of it into food as the people there are volunteers. To me, there's nothing worse than a hungry person in the US in this day and age.

We also have special local Foundations that will distribute money to people for medical/dental care etc. This helps those who are less fortunate to get a tooth pulled, set a broken arm, etc at a local clinic. Not sure what % ends up there, but they are decent. Maybe you could set up a "JustJason Foundation" of your own?

 

[paulspaddle]

Re: Donating large sums to charity

Wow, congrats!!

10 years ago I won $250 000 on a local lottery. What an amazing feeling that was. (I was 30 years old at the time)

Here in Canada you don't pay taxes on winnings.

I did a few things:

-paid off debts

- got married and had a fun wedding with an open flowing bar with lots of 'good' wine and scotch.

-gave my folks 25K and a cruise.

-bought a newer vehicle (still couldn't get myself to buy new)

-sold my house and 80% (I didn't have much) of my belongings and took a year long trip around South East Asia

-went with a financial planner and invested about $185 000.

Unfortunately there is an "unfortunately" to this.....

Unfortunately, our financial planner turned out to stink and we invested in the market at the worst possible time. (remember the tech bust in 2000?) In the year we were gone, we lost over $100 000. We pulled money from our deflated investments to buy our house and I went back to school for 5 years and thus its now mostly just a memory.

My little piece of advice I would offer is take your time. If this happens again, I would lock it up for one year in a GIC and do.....nothing. There are some tax benefits to large donations, but you might do better topping up a savings plan and getting some monies back at tax time. (that's free money)

We donated to private orphanages in China, and Nepal where we saw a direct need. This is only personal preference, but I would set up personal trust fund for family for education purposes only. I like the food bank suggestions given. Keeping it local is also a good suggestion. A donation to charity is a very personal decision, but my only piece of advise would be to take your time. It's exciting, people around you are excited, they want to hear the 'story' and there might be that pressure to 'do something', but there is no hurry.

I respect you for having such a generous spirit! Congrats!!

 

[aspeck]

Re: Donating large sums to charity

Congratulations on your Christmas Present! That is awesome, dude!

There is more that goes into the Charity/tax thing than what I am going to write, but at least it will give you an overview ...

When you give to a charity (it doesn't HAVE to be a 501(c)3 incorporated charity, but it does help if the IRS comes looking) basically you can write off a deduction up to 1/2 of your income. The rest of the charitable gift will be a contribution carry-over to the next year.

For example, you had 100K of income this year and you donated 60K to charity. You would be able to reduce your income by 50K so your taxes would be figured on the 50K level. The remain 10K of charitable contributions would be carried over to next year and you would be able to deduct that from your taxes then.

I have the priviledge of dealing with several 501(c)3's, so I need to stay somewhat current on the tax code that way.

There are also some other things you can do to take advantage of the tax breaks, like charitable trusts, etc. With a charitable trust, you can take the tax deduction this year, give all the money to the charity, but you get to take advantage of the income generated from the trust until the time of your death. At that point the value of the trust goes to the charity (or charities) named in the trust. This can be a good way to give the money away, but still get to use the proceeds from it while you are alive.

I can give you a few other ideas as well, if you would like. When giving to a charity, I recommend, as others here have, that it be one that you know and trust (local ones often times seem to do the most with your money). If you do not know or trust the charity, I would agree with Ladyfish's comment about specifically designating what the gift if for. However, if the charity is known and trusted, it is in the best interest of the charity to be able to use the funds where they are needed. We have had people donate to things very specific and we have had to send the money back, because although it was for a good purpose, that purpose what not in our plan or mission statement and would not have been feasible, or cost effective to do. We do like it when money comes in for "the work at the Rural Medical Clinic" or "for the Training Centre", or "for the food bank", or "for general outreach" because these are things we are doing and any money recieved in any of these areas are a blessing. Or at the Fire Station when the moneys are "for your continued operation" or for "equipment" or for "EMS", etc. In other words, you can be specific without being too specific.

Hope this helps. If you have any other questions, let me know and I will do my best to answer them.