- On May 16, 2018
Worried that your elderly mother is giving a lot of her money away to charity? Worried she won’t listen to you about these donations? Maybe your approach could involve the following:
Have Mom check to see if the organization where she is sending money is tax exempt. Gifts to the tax exempt entities permit the deduction of the amount on tax returns. You and Mom can use the new online tool from the IRS to check on entities’ tax-exempt status. Go to irs.gov and open the Tax Exempt Organization Search (TEOS). This search tool is accessible from smart phones and tablets as well as computers. TEOS will allow you and mom to view the IRS determination letter for the organization’s tax exempt status. Without such a letter, donations to the organization are not tax deductible. Maybe that will convince Mom.
Even if the organization is tax exempt, how it spends the donated money may also open her eyes. Some organizations spend 90 cents of every dollar on fundraising and only a dime goes to the charitable purpose. For others, the percentages may be reversed.
Every charity is required to file a tax return – Forms 990, or 990-EX, or 990-PF, or 990-T. If one is not filed, is the organization charitable? These returns can be reviewed on the organization’s website. You and mom can go there, look at the Form 990 tax return, and compare the organization’s income (page 1) to its advertising costs (Part 1X, Line 12). If the ratio favors fundraising over operations, maybe Mom won’t want to continue to “pay postage” and help fundraise at the expense of operations.
One final thought, even if Mom gives away too much of her money to charities, if she is competent, it is her right to spend her money in any way she sees fit.