
Credit Cards for Giving - apsec112
https://www.jefftk.com/p/credit-cards-for-giving
======
stephencanon
If you’re going to be making donations in the thousands-of-dollars range in
the US, set up a donor-advised fund. You donate appreciated assets to the
fund, and direct the fund to cut checks to the charities you want to support
(this saves small local charities from having to deal with gifts of stock,
while preserving your tax advantages of doing so, which far outweigh the
credit card points). Many employers will match donations from a DAF that you
control, so you keep that, too.

We have one with vanguard charitable, which was easy to set-up and fund
(minimum $25k, IIRC), but there’s several good alternatives.

~~~
alexhutcheson
This is great advice. Other advantages of DAFs:

\- Super easy donation process - log in, search for the nonprofit you want to
give to, click a couple buttons and you're done. Even lower friction than
going to the nonprofit's website and entering credit card info.

\- If you don't already itemize your tax deductions every year, you can
"bunch" several years of charitable giving into one year by contributing in
advance for future years. For example, if you plan to donate $5k per year, you
can contribute $15k to your DAF this year, but grant $5k out of the fund each
year. You can itemize the contribution in the first year, while taking the
standard deduction in the 2nd and 3rd years.

\- Fewer things to track and list when you do your taxes. You only need to
report your contributions _into_ the DAF (often 1 or fewer per year), so you
no longer have to scour your records and record each individual charitable
donation you made.

[not an accountant nor a lawyer, not tax or investing advice]

Vanguard, Schwab, and Fidelity all have low-cost DAF options that you can set
up online in a couple minutes. Annual fees, minimum contributions, and minimum
grants vary by provider so it's worth doing a little bit of research.

~~~
stephencanon
The point about "bunching" donations is really interesting, and a very savvy
option for people whose annual donations are a little below the threshold for
itemizing deductions. Thanks for pointing that out!

------
tghw
Don't donate through Facebook. Their processes are pretty unfriendly to the
charity receiving the money. They float the money for an unspecified amount of
time, which hurts charities' cash flow. They provide less donor data, so
charities can't thank donors or reach out to them again in the future. And if
it's a personal fundraiser, even if the money goes to charity, Facebook does
charge fees.

Just give directly to the charity. If you're concerned about the fees, just
cover them yourself. Industry standard is 2.9% + $0.30.

~~~
sigstoat
> They provide less donor data, so charities can't thank donors or reach out
> to them again in the future.

wait, facebook does something to help me maintain my privacy? i hate giving
some place $25 and then getting monthly mail for the next 10 years.

~~~
tghw
I was expecting this comment.

Charities send mail because it helps them raise money, and it's one place that
direct mail still works, and it works well. You can call the org and have them
take you off their mailing list. I would just ask that if you do, also set up
a recurring donation. One time donations are nice, recurring donations are
better.

But if you're more comfortable giving Facebook more data about you (donations
contain a lot of information) but not giving that data to the charity, why are
you donating to them in the first place?

~~~
sigstoat
> Charities send mail because it helps them raise money

not every activity that helps you raise money is something you should do, even
if you're a charity.

if they'd confine themselves to pestering donors who'd given them >$500, or
even donated more than once, it'd be one thing.

> You can call the org and have them take you off their mailing list.

been there, tried that. less effective than you'd like me to believe! (and
then they've got my phone number, too.)

> But if you're more comfortable giving Facebook more data about you
> (donations contain a lot of information) but not giving that data to the
> charity, why are you donating to them in the first place?

i don't care if the charity knows who i am; i don't care if anyone (facebook
or otherwise) knows about my donations.

i care that the charities will pester me for YEARS because i gave them less
money than they'll spend printing out the wads of full color mail they'll send
me.

~~~
JMTQp8lwXL
You create second-time donors by persistently contacting first-time donors.

------
donalhunt
In Ireland, I try and make donations of at least €250 (usually by direct debit
/ bank transfer) and complete the relevant tax form so the charity can reclaim
the income tax on the donation amount (increases the donation by ~ 44.9%).

[https://www.revenue.ie/en/personal-tax-credits-reliefs-
and-e...](https://www.revenue.ie/en/personal-tax-credits-reliefs-and-
exemptions/donations-and-covenants/charitable-donations/index.aspx)

------
smarri
ACH is a cheap way to send money too. Not much in the way of rewards if that's
your thing though.

~~~
clintonb
ACH is cheap, but many banks don’t support sending transfers to random
accounts owned by other entities. You typically have to do deposit
verification because most banks’ offerings are intended for personal
transfers. Few companies will dig into their records to find the micro-deposit
amounts for you.

~~~
smarri
As I understand it in 2021 these micro deposits or a similar control will
become mandatory (date delayed from Jan 2020), but for the time being it's
optional. I don't see why a bank won't allow an ACH payment from one account
to another - that's what the system is made for right?

~~~
clintonb
The new rule only applies to debuts (e.g., you pull money from my account,
rather than I push money to yours). See
[https://www.nacha.org/rules/supplementing-fraud-detection-
st...](https://www.nacha.org/rules/supplementing-fraud-detection-standards-
web-debits).

Most banks have some form of P2P transfer such as Zelle or Popmoney. If you
want to pay a business, they push you toward a bill pay service that often
mails a physical check.

My guess is that ACH cuts into fees earned from wire transfers. Additionally,
giving everyone the ability to send funds to any other random account
increases the bad outcomes of a login being compromised, or someone inputting
the wrong account number.

~~~
smarri
I think you're right on the ACH Vs Wire Fees earned by banks - from what I've
seen the banks earn many many multiples on Wires. Although I understand that
real time and faster payments are being explored as an alternative to Wires
which may take some of this share if the schemes get the network effect via
all banks signing up to it.

~~~
clintonb
Yep! The big banks are signed up for RTP. We consumers should start seeing it
sometime this year.

[https://www.theclearinghouse.org/payment-
systems/rtp](https://www.theclearinghouse.org/payment-systems/rtp)

Edit: Some customers have had access since last year:
[https://www.jpmorgan.com/country/US/en/detail/1320572715530](https://www.jpmorgan.com/country/US/en/detail/1320572715530).

------
egdod
Facebook already has their claws in so much of my data, why not hand over my
donation history as well?

~~~
jefftk
At least for myself, I have no objection to having my donation history public:
[https://www.jefftk.com/donations](https://www.jefftk.com/donations)

~~~
kohtatsu
I'm down for having it public like that, but until everyone does perhaps it'd
be best not to readily serialize it in a format for Facebook's immediate
consumption.

------
rglullis
Even better would be to bypass the whole finance and banking sector altogether
and have these charities adopting blockchain for this.

A stablecoin like DAI is perfect for this on the large, and later the
charities themselves could issue their own tokens and estimulate local
economies

