The GiveWell Blog

Maximizing the impact of your donation: saving on fees means more money for great charities

We recently discussed how you can give to reduce the administrative burden on charities. This post will focus on how you can save money on fees and give tax-efficiently so that more of your charitable budget can go directly to the organizations you want to support. This is an updated version of a post we originally ran in 2012; some content is the same, other content has been added or updated.

  1. Don’t wait until the last minute. Many donors wait until the very end of the calendar year to give. If you’re hoping to make a donation by that deadline, we strongly advise against this. Here’s why:
    • Some methods of donating require some planning and preparation, such as giving appreciated stock.
    • Checks are tax-deductible according to the postmarked date on the envelope—you can’t write a check in 2018, backdate it to 2017, and claim a deduction. So, please head to the post office before the new year if you’re looking to get a tax deduction this year.
    • Leaving little time between making your donation and the deadline means you’ll have limited time to react if something unexpected happens, such as your credit card charge being declined.

    We recommend building in a cushion of a week or two if you’re aiming to donate by a particular deadline. The earlier you can give, the less likely you’ll have any issues. For end-of-year giving, we recommend a target date of December 24 or earlier.

  2. Try to get a tax benefit. Details vary by country and personal situation, but a tax deduction can allow you to give much more to charity at the same cost to yourself. (That said, as discussed later in the post, we believe it is more important to give to the most effective possible charity than to get the maximum tax benefit.) Below, we discuss our understanding of donation methods for tax-advantaged giving, although please note that none of this information should be construed as legal or tax advice.

    Donors in the United States may make tax-deductible gifts to any of our nine top charities by giving to GiveWell. There are also a large number of tax-deductible options for giving to our top charities in other countries; please see the table here for more information.

    Donors in certain U.S. states and income brackets who are interested in maximizing their tax deduction may also consider “donation bunching,” or making two donations in one year rather than one donation in each of two years to take advantage of the standard deduction in one year and maximize the size of their itemized charitable deduction in a subsequent year. Considerations related to donation bunching are discussed in this post by former GiveWell intern Ben Kuhn.

  3. Avoid the large transaction fees and delays associated with large online donations. When donating via credit card, you will almost always be charged standard credit card processing fees. Making a large donation via credit card may also trigger your card’s fraud protection (though a call to the credit card company can generally resolve the situation quickly).

    We discussed some of the tradeoffs between the ease of donating via certain platforms and the fees for donors and the administrative costs to charities for processing them in a previous post. In short, we do not advise making donations via credit card if you’re planning to give $1,000 or more.

  4. Give appreciated stock and cryptocurrency. In the U.S., if you give stock or cryptocurrency (such as Bitcoin) to a charity, neither you nor the charity will have to pay taxes on capital gains (as you would if you sold the stock yourself). If you have stock or cryptocurrency that you acquired for $1,000 (and has a cost basis of $1,000) but is now worth $2,000, you can give the stock to charity, take a deduction for $2,000, and not have to pay capital gains tax on the $1,000 of appreciation. This can result in significant savings.

    Due to the administrative cost associated with processing donations of stock, we ask that donors donate stock directly to GiveWell only if the value of the stock at the time of transfer is estimated at approximately $1,000 or more. More information on giving appreciated stock to GiveWell, either through E*Trade or GiveWell’s Vanguard donor-advised fund, is available here. You can also use Betterment to donate appreciated stock to GiveWell. If you’re interested in making a donation of cryptocurrency, such as Bitcoin, to GiveWell, please follow the instructions here.

  5. Look into donor-advised funds to make the process smoother and more consistent year-to-year. Donor-advised funds allow donors to make a charitable donation (and get a tax deduction) now, while deciding which charity they’d like to support later. The donation goes into a fund that is “advised” by the donor, and the donor may later recommend a grant from the fund to the charity of his/her choice.

    We see a couple of advantages to this setup. One advantage is that you can separate your “decision date” (the date on which you decide which charity you’d like to support) from your “transaction date.” That means that if you aren’t ready to decide which charity to support yet, you can still get started on the process of transferring funds and getting a tax deduction for the appropriate year. Another advantage is that if you change the charity you support from year to year, you’re still working with the same partner when it comes to transactions, so the process for e.g. donating stock will not change from year to year. Donor-advised funds are often set up to easily accept donated stock or non-traditional assets, whereas charities may or may not be.

    Many large investment companies—Vanguard, Fidelity, Schwab—offer donor-advised funds. They generally charge relatively modest management fees. We also maintain our own donor-advised fund for donors interested in supporting our recommended charities; the minimum size for a donation is $5,000. The GiveWell donor-advised fund is likely most helpful for donors interested in giving certain types of securities, such as Vanguard mutual funds, that are not accepted by E*Trade.

  6. Find out if your company offers donation matching. Many companies offer to match employees’ gifts up to a certain amount. We recommend checking with your employer if you’re unsure whether they offer this option. Some employers have a limited list of charities to which they will match donations; consider asking your employer whether they would add the charity of your choosing if it isn’t already on the list.
  7. Consider the political environment. If you believe that your likelihood of taking charitable deductions is higher in 2017 than it will be in 2018, consider increasing your giving this year.
  8. Choose your charity wisely. Saving money on taxes and transaction fees can be significant, in some cases approaching or exceeding a 50 percent increase in the amount you’re able to give. However, we believe that your choice of charity is a much larger factor in how much good your giving accomplishes.

    Our charity recommendations make it possible to support outstanding, thoroughly vetted organizations—which we’ve investigated by reviewing academic evidence, interviewing staff, analyzing internal documents, conducting site visits, assessing funding needs, and more—without needing to do your own research. We publicly publish the full details of our process and analysis, so you can spot-check whatever part of our work and reasoning you’d like to.

Final notes

If you support our recommended charities (on the basis of our recommendation) but you don’t give through our website, please fill out this form to let us know about your gift; doing so helps GiveWell track our impact.

We believe that even when dealing with a relatively complicated gift (for example, a gift of stock), it’s possible to give quite quickly and with only minor hassle. The much more difficult challenge is choosing a charity, and we’ve tried to make that easy as well. We hope you’ll give this season, even if you’re just starting to think about it now.

If you’d like more advice about how to donate, please don’t hesitate to contact us. We’re happy to talk.


  • What about using the paypal giving fund? They ran a promotion for the month of December that stated they would cover the fees and contribute an additional 1% match. I made my contribution to AMF using it, but GiveWell and SCI were not participants.

  • Raj Varma on December 19, 2017 at 4:27 pm said:

    Thank you Rob for letting us know about this special that PayPal is doing. AMF and Give Directly, and possibly more of the charities that GiveWell recommends are included in this special.

  • Catherine (GiveWell) on December 19, 2017 at 7:37 pm said:

    Hi Rob,

    Thanks for the suggestion! We did participate in the PayPal Giving Fund program in the past. However, we found that the donation data provided to us by the program was administratively burdensome to process. We un-enrolled from the program last year. It’s possible that PayPal Giving Fund has made changes to their charity features since then.

    We may consider re-applying at some point in the future. In the meantime, we believe that – with administrative costs considered – giving via credit card or PayPal for donations under $1,000 is a relatively cost-effective donation method.

  • The new U.S. tax law limits state and local deductions to $10,000 annually and sets the standard deduction at $12,000. Do you agree that therefore anyone with an ~$80K+ income in a high tax state may now want to consider donation “bunching” as you suggest above? Previously, these people would have been itemizing regardless – now you can only itemize once you give over $2K in donations.

  • Thanks Catherine, the post was helpful to me. I had thought that paypal debits would have lower fees than credit card charges, but your post help illustrate that is not the case.

  • Raj, I’ll defer to GiveWell as to whether leveraging the PayPal Giving Fund is a good idea. I saw the promotion and liked the idea of eliminating the fees, getting the credit card rewards, and the additional 1% match they threw in.

  • Rob & Catherine:
    I am very grateful to Giving Well for all the outstanding work they do in helping us decide what charities to donate to. Also, I appreciate Catherine’s insights, but wonder if PayPal has made the necessary changes to be less burdensome this year. When I made my donation to AMF earlier this morning, the transaction went very smoothly and I got the necessary tax receipt from PayPal immediately. Given my experience, I remain uncertain about the suggestion for restricting credit card payments to donations for less than $1,000 when the use of PayPal avoids all fees and PayPal makes an additional 1% contribution to the Charity. Unless I am missing something, I feel inclined to make my donation to Give Directly using PayPal.

  • Catherine (GiveWell) on December 21, 2017 at 8:37 pm said:

    Hi Ryan,

    We can’t give specific tax advice; however, our understanding is that is a strategy that donors in such positions might want to consider.

  • Catherine (GiveWell) on December 21, 2017 at 8:43 pm said:

    Hi Raj,

    Thanks for letting us know about your experience! Just to clarify, the part of the PayPal Giving Fund process that was burdensome was the work necessary for us to process donations (back-end), rather than the front-end for people making gifts through PayPal. We are unsure whether the process for us (as donation processors) would be different today.

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