by Elaine Gast

The average tax refund this year is $2,379, according to USA Today, and three of four taxpayers are getting one. The question is: What to do with all that money? Before you splurge on something you could probably do without, consider this: Your refund could do the world some good.

During tax season, writing a check to charity may not be foremost on your mind, but it should be. "People are 'disaster and December' givers," said Bill Strathmann, CEO of the nonprofit Network for Good, a leading vehicle for online giving. "While it's great to support people in urgent times, December giving means your wallet takes a big hit when you can least afford it -- the holidays."
 

While there's truly no bad time to give, when could be better than when you come into some cash?

"Research shows most people spend their refunds on retail items, but that's not the best investment," said Strathmann. A better use of your refund, he said, is a charitable donation -- or one of many.

"Think about giving like you think about your 401k -- it's something you contribute to regularly because you care about your future," he said. "With charity, if you make smaller, regular contributions, it's easier on your finances and better for the causes you care about."

Strathmann does his own giving year-round, with automatic monthly deductions going to his favorite charities. As long as you've got a credit card and a charitable bent, you too can set this up through Network for Good. Not only can you donate to more than 1 million organizations, you can also get receipts and have donation records stored for you -- making it easy to keep track of your donations next tax season.

The idea of donating tax refunds is catching on in the U.S., albeit slowly. A few organizations have taken it on as a promotion. The Connecticut-based Refunds for Good, for example, encourages people to donate their phone tax refund to one of three handpicked charities. In a slightly different vein is the for-profit Taxes2Charity, which donates $15 for every return you pay them to file for you.

Perhaps one day,  donating your refund will become virtually automatic, as it is for some tax filers in the U.K. Under the Self-Assessment tax system (of which only certain people qualify for), donating any portion of a refund is as easy as checking a box and entering a charity code number. The HM Revenue and Customs Office (similar to our IRS) does the rest -- distributing that amount directly to the charity listed.

Many U.S. states include lines on individual tax forms where taxpayers can contribute to a few selected organizations, according to the Federation of Tax Administrators. Yet these programs fall short of offering taxpayers their choice of charities. Can you imagine a day when the IRS links to an organization like Network for Good, giving everyone that option?

It's an idea worth considering, and one that would likely change how people view their tax refunds. Until that day comes, it's up to us to resist the urge to spend it all, and instead, give in to doing some good.
 

Based in Palo Alto, Calif., Elaine Gast is a writer and communications consultant for nonprofits, foundations, membership associations, businesses, and individuals. She has authored six books, contributed to Fodor's Travel Publications, and published articles in numerous magazines and newspapers.  Elaine is president of Four Winds Writing, Inc.

  

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