This article was first published in Islamic Finance news Volume 17 Issue 1 dated the 8th January 2020.
Aliredha Walji, Vice President, USA, contributed an article to Islamic Finance news, throwing light on the tax efficiency aspect of charitable giving.
According to a research study conducted by the Institute of Social Policy and Understanding, US Muslims are motivated to give to causes that not only impact fellow Muslims, but also humanity at large. This is due to both a sense of religious obligation as well as a feeling that those who are endowed with more should share with and help those who are less fortunate.
Financially speaking, December is a great time to consider donating to one’s favorite charities in a tax-efficient manner. For both donor advised funds (DAFs) and direct contributions to registered 501c3 non-profit organizations, the deadline falls on the 31st December. Those who have company stock can donate appreciated shares and save on capital gains taxes as well.