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What is the Difference Between a Contribution and a Donation?

‘Donation’ and ‘contribution’ are words often used interchangeably, but they aren’t true synonyms when it comes to philanthropy, as they can mean different things. Donations and contributions are both great options for giving to nonprofits; however, it's good to know the difference between the two so you better understand how you choose to commit as a prospective supporter. Plus, you will want to understand your potential tax benefits after making a gift (more on this below).

The difference between donations and contributions is that donations are quantifiable gifts, such as money, given to a charity, and contributions are gifts that may or not be quantifiable, such as funds or even your time or talents, provided for a cause you want to support. Essentially, all donations can be counted as contributions but not all contributions are donations.

In addition to money, items like clothing and automobiles given to charities can qualify as donations. The same cannot be said for contributions, since a contribution made does not have to be in the form of an actual object. Basically, a contribution can be more abstract in nature and does not have to go to a charitable cause.

Looking Closer at the Differences Between Donations and Contributions

To recap, the key distinction between making a donation versus a contribution is that donations are intended for a specific charitable organization or purpose, whereas a contribution can be in support of something you are passionate about, but is not necessarily in service to a specific organization or even a charitable cause.

So, what does this look like in practice? An example is if you donate money to CommonBond, you are providing funds to a specific nonprofit that supplies affordable housing to nearly 13,000 individuals and families throughout Minnesota, Wisconsin, Iowa, and South Dakota. But if you want to make a contribution that supports affordable housing, you may choose to volunteer or provide a service with your time while offering a skill you think supports affordable housing in a more general sense.

Tax Benefits in Relation to Giving

One of the perks of choosing to donate is the impact it can have when it comes time to file taxes. Charitable donation deductions are available when giving to qualifying not-for-profit 501(c)(3) organizations. However, not all nonprofits qualify for tax deductions. If they have charitable, scientific, religious, educational, or a literary purpose, along with the required 501(c)(3) status, they generally qualify — this includes giving to affordable housing nonprofits such as CommonBond. To learn more about charitable contributions and deductions in relation to tax benefits, visit the IRS website and be sure to check out these tips.

Give to CommonBond with Confidence

CommonBond has an excellent reputation among nonprofit organizations, with a four-star rating on Charity Navigator, meaning you can give with confidence. Donations and volunteers are what keep our operations going, as we look to expand affordable housing from nearly 13,000 people in the Upper Midwest to 15,000 over the next two years. Make a donation, volunteer, or contact us to learn more. You can also learn about legacy gifts, if you are interested in making a lasting impact.


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