The Importance Of Giving: Why Are Donations Important?
Making donations to charities or not-for-profit organisations are not just business transactions. Every donation is creating a connection between you and the community around you.
In 2022, Charities Aid Foundation (CAF)’s World Giving Index 2022 found that record numbers of people globally chose to give to charity in 2021. Despite facing huge challenges due to the COVID-19 pandemic, environmental disasters, and other significantly detrimental events, more than 3 billion people reported having helped a stranger. Millions give to charity on a regular basis to support causes they believe in, as well as for the positive effect it has on their own lives.
At St Merkorious Charity, generous gifts of money, food, clothing, and daily essentials are what helps us support vulnerable people throughout Greater Sydney. From food relief to education programs to community initiatives like our Community Choir, the donations we receive are what gives us the ability to uplift and give hope to those who need it the most.
The Two Most Common Types of Donations
Although you can donate to charities and not-for-profits in many ways, they mainly fall under two categories: Monetary and In-kind.
The most common type of donation are one-time donations. This occurs when someone gives a specific monetary amount to an organisation on a one-time basis.
For those who want to contribute more significantly or regularly, they can choose to donate money through:
- Recurring Gifts: A donation that is ongoing and follows a consistent schedule. Recurring gifts can help organisations make forecasts into funding and scheduled payments throughout the year, helping them understand what their capacity is for their programs and initiatives. Recurring gifts can also help the person donating by spreading their contribution out over time. For example, you might not be able to donate $300 all at once, but you may be able to budget an extra $25 a month as a recurring gift.
- Planned Gifts: Setting up a planned gift is a great way to continue supporting organisations even after death. There are a number of ways you can use planned giving, such as bequests, trusts, or naming the charity as an insurance beneficiary, to build charitable giving into your life plans. Some can even be considered a tax deductible donation now!
In-Kind donations include gifts of goods, services, time, or expertise. These can greatly alleviate stress on the charity or not-for-profit and help them use their financial resources in better ways.
Gifts of goods, like pantry staples, laptops, or art supplies, helps the money that the organisation spends go further when purchasing necessary items for their mission. Donated services, time, and expertise allows organisations to put more money toward their mission instead of hiring additional staff or contractors and bring experience and knowledge that might otherwise need to be outsourced.
``It's not how much we give, but how much love we put into giving`` - Mother Theresa
Giving To Charities = Giving To Yourself
In Australia, donations that are $2 and above made to organisations such as St Merkorious Charity that are endorsed as a deductible gift recipient (DGR) by the ATO are tax deductible.
It must also be a genuine gift – you cannot receive any benefit from the donation. This means that purchases from a charity, such as raffle tickets, items or food cannot be claimed as tax deductible gifts.
By giving to DGR-endorsed charities, not only will your donation help others in the community who need it the most, it will also help you lower your taxable income. Come tax season, this means that you will either receive a higher tax refund or a reduced ATO debt.
However, not all charities are DGR-endorsed. There are specific requirements that charities must meet to be a deductible gift recipient. If you intend on making a tax-deductible donation, make sure you check the charity’s DGR status by looking up the charity on the ACNC Charity Register before you continue with your gift.
Four More Great Reasons To Donate
1. Giving to charity makes you feel good
Donating to charity is a major mood-booster. Knowing that you are directly contributing to making others’ lives better is hugely empowering and can make you feel happier and more fulfilled. Research has identified a link between making a donation to charity and activating the area of the brain that registers pleasure – proving that ‘it really is far better to give than to receive’.
2. Giving to charity strengthens personal values
Having the power to improve the lives of others is a privilege to many people, and one that comes with its own sense of obligation. Acting on these powerful feelings of responsibility is a great way to reinforce our own personal values and help us feel like we are living in a way that is true to our own beliefs and morals.
3. Giving can reintroduce friends and family to the importance of generosity
Knowing someone who gives to charity can often motivate others to begin to give to charity themselves.
Creating opportunities for family and friends to donate together can bolster relationships through a shared goal and often raises more money than could otherwise be possible through individual donations. Working together could help you to make even more of a positive impact.
4. Giving to charity builds and strengthens community
Giving to local charities can be a powerful way to invest in the people and places that make up our everyday lives.
As a member of your own communities, you are most likely to identify community causes that can benefit from charitable giving and support. You might also have the clearest insights into how to best contribute your money or time to magnify and strengthen your positive impact.
At St Merkorious Charity, we are grateful for all the support that we receive from our community. We have a strong and growing group of dedicated volunteers, generous donors who give us money, food, and daily essentials, and industry experts who support our cause with their knowledge.
As we continue with our mission to tackle poverty with love, compassion, and tolerance and give hope to those who need it most, we ask for your help and support to expand our services to uplift more and more vulnerable people holistically in Greater Sydney.
Contribute today and help us build a stronger tomorrow.