During the holidays, it seems there are endless worthy charities relying on the spirit of the season to foster donations. It can be a challenge to decide which causes should receive your hard-earned dollars. Should you support the environmental group that just knocked on your door or the police association that called to ask for your support? Does the money you drop in the bell-ringer's bucket count for tax purposes? Since many of us are faced with the reality of less to give, we want to make sure our money gets to the right place and does the most good.
If you know the organization and you know their work, you will know with some degree of confidence that your gift will be put to good use. If you are interested in giving to a new cause, do a little research. A legitimate charity should have a working phone number and mailing address. Avoid responding to cold calls from organizations with which you are not familiar, and always ask for more information in writing before committing a gift. Take a few minutes to call a charity before donating and make sure you get a live person on the phone to ask some basic questions about the charity's purpose.
Here are some other tips from the American Institute of Philanthropy to help make sure your money is well spent:
- Ask if your gift is tax-deductible.
Some nonprofit organizations that solicit gifts are not charities, meaning that you can't deduct your donation at tax time. It would also be wise to consult with a tax professional before giving if you intend to deduct your gift.
- Understand the group's work.
Charities tackle problems in different ways. You want to give a gift that's addressing a cause that is important to you in a way that makes sense to you.
- Ask questions.
Charities are required to provide information about their programs and expenses. Ask: How will my gift be spent? How many people did you help last year? In what way? If you don't get adequate answers, don't give.
- Find out about the charity's expenses.
In general, efficient groups will spend at least 65 percent of their funds on the causes they support, but acceptable level of administrative cost is not a hard-and-fast number. Some causes require more administration than others. An organization should be able to explain why their administrative costs are higher than others'.
You can learn a great deal about a charity if you give them your time before you give them your money. Hands-on experience will tell you how the organization is managed and how effectively it accomplishes its mission.
- Protect yourself.
Don't give out credit card or personal information in response to phone, e-mail or door-to-door appeals. If giving online, locate the charity's website yourself rather than linking through an e-mail. Above all, don't give cash. Your best bet is to mail a check to the organization.
If you'd like more information on a particular charity, a good starting point is the charity's website, which should include details about programs and how gifts are spent, as well as financial information such as an annual report. The Ohio Attorney General's Office offers an Online Charitable Registration Search, which allows potential donors to verify if an organization is registered and in good standing. Another source of free information is Guidestar, which posts copies of charities' federal tax filings, or state charity regulators. The American Institute of Philanthropy, Charity Navigator and the Better Business Bureau's Wise Giving Alliance also offer ratings of charities.
From the bell-ringers on the street corners to the stars, hearts or clovers they try to sell you at cash registers to big name, established charities, the holidays offer numerous opportunities to give. Trust your instincts. If you still have doubts about a charity, don't contribute to it. Instead, find another nonprofit with which you feel comfortable.
Giving is part of the meaning of the holiday season. Just be sure you are following your head, as well as your heart.
Read more Boomerang...