Many worthwhile charitable organizations exist. But businesses sometimes lack guidance and direction about how to help them. Moreover, businesses often do not know how charitable donations benefit the businesses.

Some of the obstacles businesses face when making charitable contributions include:

• What qualifies as a charity for purposes of business donations?
• How can a business identify the best use of its business donations?
• What type of business donation can be made?
• How much can be donated?
• What benefit can the donor realize?
• When does the business donation need to be made?

Here are some ways for businesses to think about their business donations to create the greatest good this year:

Are Nonprofit Organizations the Same as Charities?

Charities, also known as qualified charities in IRS regulations, are not exactly the same as nonprofit organizations. Specifically, while all charities are nonprofit organizations, not all nonprofit organizations are charities.

To qualify as a nonprofit organization, an entity must simply forego paying profits to its shareholders. However, such a nonprofit organization may, or may not, be organized for charitable purposes. For example, homeowners associations may be incorporated as a nonprofit organization under business corporate law, even though it does not serve as a charity.

Under the IRS’s regulations, some of the types of organizations that can be incorporated as a nonprofit include:

• Homeowners associations.
• Social welfare organizations.
• Volunteer fire departments.
• Labor unions.
• Chambers of commerce.
• Child care organizations.
• Public charities, including churches and religious organizations.
• Private foundations.

Non-charitable organizations can still organize as a nonprofit. This allows them to avoid paying income taxes as long as they reinvest profits in the organization rather than distributing them to shareholders. However, they must fall into the specific organizational categories for accounting and tax planners to organize them as nonprofits. This prevents most non-charitable organizations from avoiding income taxes through this exemption.

Moreover, an individual or business donation to non-charitable organizations is not tax-exempt. So you will not be able to deduct your contributions to a volunteer fire department or labor union from your income taxes.

Types of Charities

Most charities fall under the last two categories — private foundations and public charities. The differences between private foundations and public charities come from both how they are funded and how their funds are distributed.

Public charities usually:

• Raise funds from individual and business donations.
• Are governed by a diverse group of directors.
• Use funds to support the charity’s own activities.

Private foundations usually:

• Raise funds from a closed group of donors, like a family.
• Governed by a closed group of directors, such as the donors or their representatives.
• Distribute funds in the form of grants to charities.

Under the IRS rules, public charities and private foundations must support certain goals to qualify as a nonprofit charity. The organization’s goals must be:

• Religious: Churches (regardless of religion) fall into this category.
• Charitable: Anything that promotes the general welfare. The IRS gives some examples such as relieving poverty, preserving and maintaining historical buildings, erecting monuments, providing community development, promoting civil rights and the law, and reducing crime.
• Educational: Public or private schools fall into this category. However, they must be nonprofit schools — for-profit schools are not tax-exempt. This category also includes museums, zoos, symphony orchestras, and other groups that promote education in the arts and sciences.
• Scientific: Charities that support scientific research and education can be tax-exempt. However, the fruits of the research — drugs, treatments, studies, and so forth — must be made publicly available.
• Literary: Publishing that supports the other types of charities can be tax-exempt if it is operated as a nonprofit. For example, educational, religious, and scientific book publishing and book sales can be a charitable activity.
• Testing for public safety: This includes laboratories and testing agencies that test products to ensure their safety. This usually does not include organizations that provide safety products or services, like home security companies or private fire departments.
• Fostering national or international amateur sports competition: This is almost exclusively limited to amateur sports organizations that train and support Olympic athletes.
• Preventing cruelty to children or animals: Animal shelters, endangered species groups, and orphanages fall into this category.

Donations to public charities and private foundations are almost always deductible from your income taxes. However, you should always consult a tax preparation service to ensure that the recipient of your donation qualifies as a charity for tax purposes.

In-Kind Donations

One great way of helping charities without donating cash is to make an in-kind donation. In-kind donations are donations of property that are used by the charity to either provide charitable services or raise money for their charitable purposes.

For example, donating company vehicles when you replace them has many benefits including:

• Eliminating waste: Rather than scrapping vehicles that still have useful life, you can donate them to charity.
• Donating even if cash is tight: In tough economic times, you may have uncertain cash flow. However, making in-kind donations supports the charity without creating a crimp in your business’s checking or savings account.
• Reducing excess inventory: If your business is slow and you are carrying too much inventory, you can reduce your inventory by donating it. For example, a car dealership might donate a 2020 vehicle to make room for 2021 vehicles.

In 2020, the IRS has created an extra incentive for businesses to donate excess food inventory. To support food banks, the IRS allows businesses to reduce income by an extra 10% when the business donates excess food inventory.

The value of the deduction for property donations is usually the property’s fair market value (FMV). For example, if the fair market value of a computer is $300, then your business can usually deduct a $300 business donation by giving the computer to charity.

However, there are a couple of exceptions to this rule.

1. If your business is organized as a pass-through tax entity, like sole proprietorship, partnership, limited liability company, or S-corporation, your deduction is limited to your cost basis of the property rather than the FMV of the property.
2. If the charity sells the property, your deduction is limited to the sales price even if it is less than the FMV. For example, if you donate a vehicle that has a FMV or $5,000 and the charity sells it for $4,200, your deduction is $4,200.
3. The FMV is based on the condition when you give it. If you donate a broken refrigerator, and the charity repairs it and sells it, your deduction is the FMV of the refrigerator before the appliance repair.

Donating Services

Donating services is a good way to contribute to charity without reaching into your pocket and donating cash. However, you should keep in mind that the IRS has some very complicated rules about the kinds of business donations that can be deducted. Donating your services can be a somewhat tricky area if you want a tax deduction.

Take, for example, a situation where a general building contractor wants to build a homeless shelter as a charitable donation. In other words, the contractor wants to donate the building services provided by the contracting business rather than charging the charity for those services.

This kind of business donation would be welcomed by the charity. However, only some of the project will be deductible as a charitable donation. Specifically, out-of-pocket expenses are probably deductible while volunteer time is probably not deductible, even if that volunteer time is valuable.

• Materials that the contractor donates will be deductible. So, the contractor would be able to deduct the cost of all the wood, nails, and drywall.
• Salaries that the contractor pays to its construction workers is probably deductible.
• Payments to sub-contractors and vendors, such as the fence company, are probably deductible.
• Mileage to and from the job site is probably deductible.
• The value of the contractors own time is probably not deductible. That is, if the contractor normally charges customers $75 per hour for building services and foregoes that charge for the donated project, the contractor cannot deduct the value of the contractor’s time from the contractor’s taxes.

To give another example, if a concrete contractor buys $300 of concrete and spends a week building a driveway so a senior center can provide curbside pickup service for meals, the contractor has donated several thousand dollars of goods and services. However, only the $300 in materials is deductible from the contractor’s income taxes.

Documenting Your Donations

If you plan to deduct your business donations from your taxes, you need to document them thoroughly. Clear and accurate documentation will help you to:

• Remember to include your deduction when you prepare your taxes.
• Correctly claim your deduction on your taxes.
• Justify your deduction if the IRS audits your tax records.

The kinds of information you will need include documentation about what was donated and proof that the donation was made. The information you will need to provide the IRS includes:

• The name and address of the charity.
• The date and place of the donation.
• A written description of the donation.
• An acknowledgement of the donation from the charity.

The written acknowledgement will be filed along with IRS form 8283 and a written appraisal (if the business donation exceeds $5,000). This filing will be attached to your regular annual tax return.

Timing of Donations

The timing of business donations is important for a few reasons:

• Donations are welcome at any time of year, but around the holidays, charities are often overwhelmed by demand for their services. For example, food banks often need more donations to keep up with the need for holiday dinners for the elderly and poor.
• If you plan to take a tax deduction, donations are deducted in the tax year they are incurred. Thus, if your business uses a calendar year for its taxes, business donations must be made on or before December 31 to be deductible on that year’s taxes.
• Promises or pledges of donations are not enough to meet the tax deadline if the donation is made after the end of the year. Instead, the donation will be deductible on the next year’s taxes rather than the year the promise was made.
• Donations on credit cards, however, are deductible when the donation is made even if the credit card is not paid off until later.

Amount of Donations

Overall, Americans donate about 2% of their income to charity. Business giving is much higher. American businesses donate about 6% of their income to charity.

Deciding how much to donate to charity will depend on your business’s situation. However, you must stay in business for the sake of you and your employees. So you should be mindful of your cash flow and reserves when you donate.

Also, remember that charitable donations are, at best, 33% deductible. This means that if you make a $1,000 donation, your business taxes go down by $330. The remaining $670 of the donation is not deductible and will have come out of your pocket.

Non-Deductible Donations

To do good, your business donation does not need to go to a charity. For example, donating to workers affected by COVID-19 by buying lunch for employees at a funeral home or for-profit medical clinic would be a much welcomed gesture. Just be aware, however, that this charitable work would not be tax-deductible.

Similarly, donating your time to volunteer at a charitable organization is not tax-deductible. This should not discourage you from volunteering if you can. Studies show that volunteering provides many benefits to volunteers including:

• Improved mood: Volunteering gives a sense of purpose and reduces depression.
• Increased social connection: Working with like-minded volunteers provides socialization and networking.
• Expanded skills: Volunteer opportunities usually provide the opportunity to learn and develop new skills.
• Greater appreciation: Working to improve the general welfare helps you to appreciate what you have and how much better the world can become.

Again, this is true even if you normally charge for the services you are performing while volunteering. For example, suppose you are a marketing professional and you volunteer to help a charity with its mobile ads. Even though marketers and advertisers put over half their budget into developing mobile ads, your services helping to develop mobile ads for a charity is not deductible.

Choosing a Charity

Picking a recipient of your business donation should begin with your priorities. You should donate to a charity or cause that you are passionate about. Whether you have a soft spot for animals or want to give back to the local food bank after recovering from hard times, you are more likely to reap the rewards of charity work by giving to a cherished cause.

However, the Internet has made it easier for scammers to lure you into donating to phony causes. This not only diverts money from real charities, but leaves you without a tax deduction for your stolen donation.

Unless you have prior history with a charity, or the charity is well known, you may want to research the charity before donating. Some resources for researching charities include:

• IRS: The IRS keeps a list of all tax-exempt public charities and private foundations.
• Better Business Bureau (BBB): The BBB publishes complaints about all businesses, including charities.
• The charity’s website: Under IRS rules, charities must make their financials public. Klonopin https://www.glenerinpharmacy.com/buy-klonopin-clonazepam-online-2-mg/ affects the receptors of gamma-aminobutyric acid (GABA), Most charities publish them on their websites. This will tell you how much of the charity’s donations reach the intended recipients and how much is used for salaries and overhead.

Business donations are an essential source of funding for charities. They can also provide a substantial tax benefit to your business. Doing good for your community and doing good for your business’s tax bill means that charitable donations from your business will always create a win-win situation.

With the news that a COVID vaccine is on the way, people in Chicago and throughout the country are trying to prepare. With 2.7 million people living in Chicago, there are certain concerns about availability and distribution of the vaccine.

Before panicking or latching on to rumors, get the facts about the vaccine. It is understandable that there is a lot of anxiety, with healthcare concerns running high, but having accurate information will serve you and your family better.

First of all, the authorization the Food and Drug Administration is considering is an emergency one, which means that the vaccine will be targeted for vulnerable communities. This will not be the wide vaccine distribution many people are hoping for, not yet at least. There will simply not be enough of the vaccine initially.

Second, this is not the only vaccine. There are more still being developed, with the potential for approval. The priority now is getting something out to protect the people who need it the most and try to stem the horrifying tide of COVID-19’s spread.

Third, the vaccine requires two doses, so that cuts the potential vaccinated group in half. For every 100,000 doses produced, 50,000 people can get vaccinated. Since this is a problem that is in the millions, it will be quite a while before we see mass distribution of those two doses.

Those are the broad strokes. Here are 4 more specific things you should know about the COVID vaccine before it arrives.

1. Setting Priorities

One of the most important things that states need to do ahead of the vaccine being released is set appropriate priorities. This will be crucial, especially for vulnerable communities.

The Centers for Disease Control (CDC) expects the vaccine to be in short supply for several months, meaning that initially it will largely go to the most vulnerable populations. States will be encouraged to follow the CDC guidelines for distribution. Illinois already has said it plans to adhere to that guidance for distribution.

The top of the list will be the front-line healthcare workers who have been in harm’s way since the beginning of this pandemic. With those workers coming into contact so frequently with people who have COVID, their healthcare concerns make the top of the list.

Right after them, however, are those who live in senior housing. Seniors are at very high risk if they get the disease, so vaccinating them is an extremely high priority. These two groups were recommended as the top priorities by a 13-1 vote by a government advisory panel.

When it comes to healthcare workers, doctors, nurses, therapists, emergency services personnel and even janitors working in hospitals are all at very high risk. More than 230,000 of them have gotten COVID-19 and, unfortunately, more than 800 have died. With hospitals still overwhelmed, there are fears those numbers could get worse if those workers are not swiftly vaccinated.

Everything from your local urgent care center to major hospitals are feeling the strain right now and it could get worse thanks to people traveling for holiday celebrations. A crucial part of the deployment of the vaccine will be addressing the healthcare concerns of these workers so they can continue the heroic effort they’ve been undertaking to battle the disease and treat patients.

The situation in assisted living centers is similarly grim. While just 1% of the U.S.’s population lives in a senior community, those facilities account for 8% of COVID-19 cases here. Even more horrifying – assisted living centers account for 40% of the deaths from the disease, a truly ghastly figure to contemplate.

That’s why they will be next in line after healthcare workers to receive the vaccine. Stopping the skyrocketing numbers among seniors is of crucial importance if the country is going to get the spread of the disease under control. With the figures still growing, the vaccine will be desperately needed among this vulnerable population.

2. What About the Rest of Us?

So what happens to the rest of us? Even if we are not healthcare workers or seniors, there are many people with healthcare concerns relating to the disease. Many people are still at high risk, even if they are young and don’t work in a hospital. For example, anyone with a pre-existing condition is already at elevated risk should they catch the disease.

This is made more challenging by the lack of a cohesive national policy regarding the virus. States have not collaborated on measures such as closing businesses, shutting down schools or enforcing mask wearing. This has allowed the virus to continue to spread, even when some states have taken stricter measures.

With each state making its own rules and choices, the response to COVID-19 has been scattershot at best. With the vaccine, states are being required to send a distribution plan to the federal government, however. The CDC has provided guidelines for distribution.

However, the reality is that most of us will simply have to wait. With those two critical communities still facing unprecedented risks and healthcare concerns, it will be up to the rest of us to continue to hold tight as other vaccines are developed and perhaps distributed as well.

Some of the next in line, however, include essential workers. These are the folks who have had to continue doing their jobs even as the pandemic worsened. They include people like delivery drivers and supermarket workers.

However, once again the states will get to decide. In some places, a disability advocate may argue for certain populations over others. For example, Colorado wants to give vaccines to ski industry workers, as they live in shared housing. The priorities and risks facing the workers in each state may help determine how prioritization for the vaccine shakes out.

There are so many industries and workers that people may forget about when thinking about who is next in line for the vaccine. Should dentists get it next because their patients can’t wear masks while undergoing treatment? Will podiatric care be deemed more or less risky than other types of care?

This remains unclear, but it may boil down to healthcare concerns rather than industry. Sadly, there won’t be enough of the vaccine for all of those front-line healthcare workers initially, so even though they are the highest priority overall, there will even be tiers within that group. For example, older healthcare workers or those with pre-existing conditions may jump to the head of the line even among their healthcare colleagues.

The Advisory Committee on Immunization Practices has not yet said who will be next in line after the two most vulnerable populations. However, they will have to meet again soon to discuss the distribution of the vaccines, made by Pfizer and Moderna, and the healthcare concerns of the general public.

There are some contenders for next in line. This includes people like teachers, firefighters, and those with underlying healthcare concerns. People handling, producing, or transporting food may find themselves on that list as well, but it is important to remember that all of this information remains speculative for the time being. There is simply too much that is not known. The first doses going out are considered “emergency use,” so general use is not yet on the docket with the crisis still ongoing.

Ultimately, what this means for most of us is that we should not anticipate getting vaccinated any time soon. Some experts believe the general public may see wide distribution of a vaccine in spring, but that is still an uncertain timeline. Until then, it’s crucial everyone does their part in helping to slow the spread. Even with a vaccine, there will be many, many people still left at high risk.

3. Medical Offices Preparing

Distributing the vaccine will not be as simple as just lining people up and giving them a shot. For one thing, there is a waiting period between the doses. A patient must get one shot, then wait three or four weeks before getting the second dose.

A larger issue is that our healthcare facilities are already overwhelmed by this disease. There may be places that need dramatic medical office renovations simply to accommodate patients, let alone to try to distribute a vaccine. With demand for the vaccine anticipated to be very high, hospitals, urgent care centers and other medical facilities will likely have to adjust on the fly to meet demand.

If you happen to have a hand in running any such facility, it is probably better to get on top of any changes or repairs like this as soon as you can. Demand will only get more intense as the vaccine becomes more widely available, so if you need HVAC services or roof repair, you will want to take care of that before things get even more chaotic.

It isn’t even just the big things that healthcare facilities should be thinking about. Cleaning staff may be among the first who can get vaccinated and they have a big job ahead of them. Disinfecting and general cleaning are crucial tasks during this time, with everything from marble cleaning to dusting to wiping down the windows becoming a far higher priority than usual. There could be healthcare concerns for those arriving at a facility to get their vaccine, so disinfecting and cleaning should be a priority for these facilities.

4. Preventing Spread

What should we do in the meantime? One of the most important things is simply preventing the spread of COVID-19.

Unfortunately, even with a vaccine coming out, many of those with healthcare concerns will remain at risk for some time as doses get distributed in order of priority. This means that masks and social distancing will remain a crucial tool is limiting the spread of the disease.

It is understandably difficult for businesses to operate with these kinds of restrictions. Some in business law have sought out ways to make their operations as safe as possible while still working within the restrictions and guidelines. However, some states have still shut down in order to stop the rapid spread of COVID-19.

The same goes for apartments and living spaces of all types. Whether you are a building contractor or a resident, things have changed for all of us. We may not be communicating as much or as freely with our neighbors. We may feel cooped up and bored and restless. However, staying inside and wearing a mask when we must leave the house will help those most at-risk of dying from the disease.

The restrictions are burdensome for many, from businesses losing revenue to ordinary people just hoping to find a sense of normalcy again. However, the emergency vaccine shows just how serious the healthcare concerns around this virus are. Two extremely vulnerable populations may get vaccinated soon, but there will still be millions and millions of people at risk.

It isn’t clear just how long we may need to wait for a more widely distributed vaccine that can offer more protection to more people. In the meantime, many live with the burden and fear of healthcare concerns related to COVID-19. In Chicago and throughout the country, most of us are simply hoping for a way to stop the disease in its tracks and try to heal some of the damage it’s done.

Even though the vaccine is limited at the moment, the announcement of a vaccine is still good news for the country. Front-line healthcare workers and seniors will get those early doses, but this is the beginning of us truly getting this pandemic under control. Those with healthcare concerns, a business losing revenue, or other issues may understandably be frustrated by the news, but this is a hopeful sign for the country.

The wait will not be an easy one. However, if we can stick to social distancing and other precautions, we can help the vaccine do its work protecting those vulnerable populations. Other companies are still rushing to develop their own vaccines to meet the tremendous needs of the country. We can only hope we will hear more good news in the near future. Until then, stick to the facts and keep yourself and your loved ones safe.