3 Tips When Donating to Your Alma Mater
When you first graduated from school, the last thing you probably thought about was giving what little money you had back to your school. But now that you are doing better in life, you may be considering donating to your alma mater.
Giving back may seem like a win-win for you and your school, since your charitable donation (in most cases) is tax deductible. But how can you be sure your money is actually going toward something that you deem worthwhile?
Here are three tips you may want to consider:
- Add restrictions to the gift. If you are giving away a substantial sum, you may want to tie some restrictions to the gift, The Wall Street Journal suggests. Otherwise, your money may go to a general endowment and be used for whatever purpose the school chooses. Some examples of restrictions can include setting up a scholarship for low-income individuals or earmarking your money for a new gym. However, be careful not to restrict the gift too much, or it could go unused, reports the Journal.
- Look at tax advantages. Financially savvy individuals may be able to give away significant amounts of money to schools without really suffering any financial impact. With a variety of tax deductions and tax credits available to those who donate, you will want to explore how giving back to your school can cut your tax bill at the same time. With this year's tax deadline just behind us, now may be a good time to consult an experienced tax lawyer and plan ahead for next year's taxes.
- Give a nonmonetary donation. You don't necessarily have to cut a check to "give back" to your alma mater. While you may not have a Van Gogh to donate to your school's art department, you could potentially donate things like science equipment and musical instruments, or even your time.
Donating to your alma mater is a worthwhile goal. With some careful planning, you can ensure that your donation will pay off in more ways than one.