In a world where so many fundraisers and charity organizations seem to inundate your doorstep, mailbox, and social media, it’s sometimes difficult to know if and how to make donations. You can’t possibly donate to all of them, and you shouldn’t try. Aside from choosing causes that resonate with you, there are other considerations to make before giving. It’s vital to do your research when deciding to donate to any charity – otherwise, your contribution to support a cause you care about may be made in vain.
We’ve all heard the horror stories about elderly individuals being scammed out of their life savings by unscrupulous fraudulent “charities.” Unfortunately, it is a sad fact of reality that not every supposed charity organization is legitimate. Aside from straight-up scammers and fake charities, it is a common assumption that all charities use their proceeds to benefit their cause. However, there are frequently expenses associated with running a charitable organization, and often, funds are used to pay for ongoing fundraising efforts, advertising, salaries of workers, and in some cases, location upkeep. So while the assumption may not necessarily be false, it behooves you to consider precisely how much of the donation is actually makig it to the intended recipients.
So what can you do to ensure your donation is a worthwhile investment? Here are a few ways you can do your research, as well as some tips for making secure donations.
First, there are several places you can go to access records on charities. The first thing you should look into is whether the charity is a registered public 501(c)(3). Websites such as Guidestar.org keep track of all charities IRS 990 forms. These forms can provide you with quite a bit of information regarding the financials of the charity.
Another nonprofit that keeps tabs on over 9,000 charities is CharityNavigator.org. While their focus is primarily on national and international charities, they do cover some local ones as well. Charity Navigator provides insight into the transparency and accountability of charitable organizations, giving each a rating of one to four stars.
Better Business Bureau’s Wise Giving Alliance also provides reports on national charities. Their reports assess charities based on 20 Standards for Charity Accountability, which include standards for governance & oversight, measuring effectiveness, finances, and fundraising and informational materials.
Along with doing your research, it is wise not to donate through telemarketers. Kiplinger and the FTC caution donors not to feel pressured by telemarketing campaigns. Senior program analyst for Charity Navigator, Leonie Giles, suggests, “you should decline any requests to give over the phone.” Often telemarketing companies working on behalf of the charity take a cut of the proceeds for the campaign, so you’re better off contacting the charity directly to make your donation and cutting out the middleman.
Rather than waiting for charities to come to you, you can take the first step by researching charitable causes that appeal to you, and when you are ready to donate, seek them out yourself. Plan out your giving in advance; this way, you don’t have to deal with feeling pressured to contribute on the spot, and yCharitable Due Diligenceou have plenty of time to research the organizations you choose to support adequately.
Finally, for security and tax purposes, the FTC recommends that you make your donations by check or credit rather than cash. You should be provided with a receipt for the amount you’ve donated which states that it is tax-deductible.