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Course: Financial Literacy > Unit 4
Lesson 2: Charitable givingCharitable giving
Charitable giving is the act of donating money, goods, or time to help people in need or support causes you care about. It is good because it makes a positive impact on the lives of others and helps create a better, more compassionate world. Created by Sal Khan.
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- What is a tax write-off?(9 votes)
- There are certain financial transactions where, if you have lost money on them, you can deduct that loss from your income, and therefore not have to pay tax on that part of what you earned. THAT'S a tax write-off.(10 votes)
- What is charitable giving?(5 votes)
- Charitable giving is something done by people who have money. The word "charity" is based on a Greek word that carries the meaning of "love". Charitable giving is done from a motivation of love. Governments encourage charitable giving by allowing givers to deduct what they give from their gross income at tax time.(7 votes)
- this is very random, but it looks like the background is a green screen, but I can't really tell, can anyone tell if it's a green screen or not.(3 votes)
- Pretty late to answer, but as someone studying film in university I can guarantee that isn't a green screen. I've worked with them extensively myself. Sal appears to have a bit of green lighting behind the bookshelf, that's probably what you are seeing. Seems like he just records in his office.(5 votes)
- If you donate oh $20000 what will happen ,
will you name be written down or what ?(2 votes)- If you donate that much money, you'll get a polite "thank you" letter from the organization.(3 votes)
- Even if they are using the money as a tax write off doesn't that still mean that people are getting help?(3 votes)
- Yes. When charitable giving is to an organization that helps people, people are being helped, and the donor doesn't have to pay tax on the amount that is given. When charitable giving is to, say, an art museum, or a scientific foundation that funds the search for extraterrestrial life, or to save the whales, or to preserve the coral reefs off the California coast, then it is also tax deductible, but whether it helps people or not is another matter.(1 vote)
- In the video, Sal talks about how donating a car to charity can give you a big tax write-off. In some scenarios, I have heard of houses and mansions being presented. Does this work in the same way that it does with a car?*(2 votes)
- Public Radio is big on the "donate your car or boat" thing. You give them the car, they give you a receipt for the donation. You use that receipt when you file your taxes and the value of the car is deducted from your gross income, so you don't pay tax on that value.(2 votes)
- What are tax write-offs, and how do they work? How do you make them effective?(3 votes)
- If you're giving to get a tax writeoff, you're not giving, you're just gaming the system.(0 votes)
- what is a tax right off(1 vote)
- A "tax write off" generally means that the money in question, has been given to a charity or has been lost in a bad business deal, so you don't pay tax on that portion of your income. It doesn't save you anything, because the money is gone anyway.(1 vote)
Video transcript
- So let's talk a little
bit about charitable giving. And this one is close to my
heart because I run a nonprofit. So why do folks donate to charity? Well, you might have your own motivations. For most folks, I think
it just feels good. They might feel that they
have certain privileges in life that other folks don't have or they might want to see a disease cured. Help educate folks, help
the world in some way. And if you haven't tried
it, I encourage you to when you donate money or you donate some of your time services or you donate goods to a
charity and you feel like, hey, I'm making the world a little bit better, it feels really good. Now, some people might be a
little cynical and say, oh well they get a tax write off whenever they donate money, et cetera. But I wanna be very clear,
'cause I've heard that a lot. Whenever someone has seen
someone else donate, oh, well they're just getting a tax write off. In the vast majority of cases you do not get more money
back than you donate. In most, most cases, if you
say donate a hundred dollars that's just going to reduce your income by a hundred dollars. And let's say your
marginal tax rate is 30% to make the math easy, that
means it'll reduce your taxes by 30% of that a hundred dollars. So if you donate a hundred dollars to a not-for-profit to a charity, you will get $30 back in
that situation on your taxes but you still donated a net $70. So when folks are donating,
don't be cynical about it. They're definitely giving
more than they're receiving. There's some special cases, maybe you have a car
that you couldn't sell for more than a few hundred dollars. And if you donate to a charity you might be able to have a slightly larger write off than that. But in the great majority of cases folks are giving more
than they're receiving. And what they're really receiving is that feeling that they're
doing good for the world.