A cash gift entitles you to a charitable deduction for the amount of your gift. You may deduct up to 50 percent of your adjusted gross income for the year of your gift. If all deductible gifts in a year exceed the 50 percent limit, you may carry the excess amount over as a deduction for up to five years.
For example, Ed Smith has an adjusted gross income of $50,000 this year. He contributes $35,000 to Ohio Northern University. He may deduct $25,000 this year and carry forward $10,000 to deduct next year.
Pledges provide you an opportunity to make a larger gift than you otherwise thought possible by committing your gift over a period of three to five years. Your pledge should be documented in writing.