Catherine Stoll is a mainstay of Heart of the Hamptons.
She logs countless hours sorting clothing donations at the food pantry and emergency assistance program on Meeting House Lane.
“I don’t consider my job done at the end of the day and say, ‘Wow, I did some good today,’” Stoll said. “I just say, ‘Okay, tomorrow, I’m going to tackle these three things.’ There is no shortage of something to do, and someone in need.”
She came to be like many volunteers post-COVID on Eastern Long Island. Stoll moved to Southampton in 2020 after more than three decades of summering here.
Whether it was her church upbringing or altruistic family values — she spent years accompanying undocumented migrants navigating the legal system in Manhattan — Stoll said she felt the drive to volunteer in her new home after she watched the global pandemic rage on.
“I just kind of fell in love with working here,” she said. “It became such a positive for me in such a dark time.”
Truth be-told, nonprofit organizations would not survive without the generosity of donors and volunteers who help build capacity, said Molly Bishop, executive director of Heart of the Hamptons.
“It multiplies what we can do,” she said. “Because now we have one person that came and got involved, and then they tell their friends. There is a huge benefit from it.”
According to the latest tax filings with the Internal Revenue Service, 85 percent of nonprofit organizations nationwide operate almost exclusively with volunteers.
Financial experts say the economics of giving is precarious but necessary — and works to benefit both the nonprofit, the donor and those in need that they serve.
Making a Charitable Gift
A charitable donation is a gift of money or goods to a tax-exempt organization. And the Hamptons certainly attracts its big gifts and luxurious fundraisers.
To name a few — earlier this month, Our Fabulous Variety Show hosted its third annual gala in East Hampton, raising more than $12,000 in arts and performance scholarships. In August, Citymeals on Wheels held its second annual Summer Bash in Bridgehampton, raising enough money to provide 20,000 aging New Yorkers with meals. A few weeks earlier, Northwell Health’s Katz Institute for Women’s Health raised a record-setting $1.6 million in support of women’s health research and programs at an annual event in Water Mill.
“If you got a million dollars from a family that lived on Dune Road, you might not really have to work so hard,” said Kevin Luss, the founder of The Luss Group, a financial advisor in Southampton.
Luss said most individual donors give just what they can afford, when they can afford it. The goal of the nonprofit is to turn that once-in-a-blue-moon contributor into a sustaining member. For example, the frequent pitch made on public radio is that the price of a Starbucks coffee per month to help keep on-air programming.
“It can even be after you die,” he said. “Anyone can do that — you do not need a lot of money to leave a bequest.”
The one-off seat or table reservation at a fundraising dinner is a gamechanger for the nonprofits that can attract wealthy philanthropic individuals or corporate donors.
Only donations made to nonprofit 501(c)(3) organizations are tax-deductible. Gifts made to not-for-profit organizations, like sports and social clubs without a charitable purpose, might not be tax deductible for donors even if the organizations are tax exempt from sales and property taxes, according to the IRS.
Generally, deductions can be made up to 60 percent of adjusted gross income — how the IRS determines how much taxes are owed — via charitable donations, but certain donations to different types of organizations might be further limited. Any contributions that exceed the limit can often be carried over on tax returns over the next five years.
Why Give?
Rocco Carriero, a private wealth advisor in Southampton and author of “Three Cords Approach to Life and Wealth Management for Business Owners,” said tax deductions earn those at the higher tax brackets more bang for their buck.
“It’s actually people that have more financial resources that have more options, when they give that money to a charity, they are very, very efficient,” Carriero said. “And they get to get the deduction right and they’re able to multiply the effect of it.”
For example, Carriero said they might be able to give away highly appreciated stock, meaning that if they bought a stock at $10 and now the stock is worth $100, they can get the full gift donation, or if they have IRAs tax deferred accounts, they can take distributions from their IRAs, which is a nontaxable event.
The Urban-Brookings Tax Policy Center, a nonpartisan, Washington, D.C.-based think tank, found that the top 1 percent of earners were able to receive the highest tax deduction, at about 30 percent in 2023. That’s compared to the lowest income earners, who earn pennies back for every $100 donated.
Luss also noted a shift from generational giving to corporate sponsorships, especially health systems investing on Eastern Long Island, which has made fundraising more challenging for nonprofits.
“If your parents and if your grandparents gave to the Parrish Art Museum, the children usually gave, and that just happened generationally,” Luss said. “I’ve seen that fall apart. That’s not really happening anymore. So, these big places out here have had to work a lot harder to meet their budget.”
Luss serves on the board of Southampton Town United Soccer Club, which has grown significantly over the years. He has advocated for members and friends of the club to enter into planned giving as a way to contribute positively to the community and suggested that even small contributions can have a significant impact.
High-net worth individuals might consider making charitable remainder trusts and life insurance policies listing nonprofits as the beneficiaries to ensure long-term sustainability.
For those interested, Carriero, whose practice is a member of Ameriprise Financial Services, is planning to organize educational workshops in Sag Harbor around philanthropic giving and making an impact with local nonprofits next year.
“Nonprofits, first, should identify who they want to share their message to. Who is able to give, and then connect them with the ‘whys,’ right? Ask, ‘Why is this work important to them?’” he said.
Doing Volunteer Work
Yes, money spent while volunteering is also a tax write-off.
According to the IRS, volunteers who pay out of their own pocket for expenses related to doing charitable work — including travel to volunteer, cost of temporary lodging or meals — that the nonprofit does not reimburse are tax deductible.
That is capped at $250 for any single expense without a written acknowledgment that there was nothing received in return.
Personal expenses, including clothing or vehicles, and the amount of time or professional services spent volunteering are not deductible.
But that’s not what gets Stoll out of bed. “If I can do something in my little corner of the world that is making someone’s life better, there are no words for how rewarding that is,” she said. Plus, she has the time to donate, not necessarily the money.
Bishop, from Heart of the Hamptons, described it as “a transformation of a person” for the students, seniors, ultra-wealthy, court-ordered participants and to those who take shirts off their backs to volunteer.
The Society of Psychophysiology Research published an international journal in 2022 that found that the act of giving a gift or volunteering secretes “feel good” chemicals in the brain, such as serotonin, dopamine and oxytocin. Some researchers say that lowering stress with the presence of these chemicals can be good for the heart and long-term overall health.
“You can see that it makes you feel better when you donate and you help give to something that is important to you,” Luss said. “Plus, these local nonprofits do real work in your community, and you very well someday could be a recipient of their services.”
