Yet your donation, regardless of size, should make the largest impact on your cherished causes and issues. When you support a charity’s best interests, you’re not selfish to support your own as well.
Give to efficient operations
In a perfect world, every cent you donate would go to fulfilling the mission you support. But some portion of every dollar goes to:
* Staff salaries
* Rent
* Fundraising
* Mailings
* Maybe even telemarketers
These expenses may leave very little for your actual cause.
Well-run organizations put most of your money toward their services or programs, not their operational overhead. The American Institute for Philanthropy recommends that no more than 40 percent of your charitable donation should go to overhead expenses; other charity watchdogs advise 25 percent.
This percentage can be determined by:
* Requesting a charity’s IRS Form 990 (required to prove tax-exempt status)
o Divide line 13 (Program Services) by line 17 (Total Expenses) to calculate the percentage paid to services and programs versus overhead expenses.
* Federal law requires charities to provide the form for the past three years to anyone who asks.
You can use the following websites to research charities and their efficiencies:
* The American Institute of Philanthropy’s www.charitywatch.org
* The Better Business Bureau Wise Giving Alliance’s www.give.org
* Philanthropic Research, Inc.’s www.guidestar.org
You can also ask for the charity’s annual reports to see if its goals seem reasonable and achievable. The report should include the:
* Mission statement
* Board of directors
* Year’s accomplishments and finances
If the charity tells you a report isn’t available, is too expensive to mail, or otherwise discourages your interest, don’t contribute.
Avoid the scam artists
Unfortunately, there are people who try to take advantage of others’ generosity. Here are ways to reduce your chances of falling victim:
* If a solicitor mentions previous pledges you don’t remember, check your records first. Don’t fund donations you didn’t make.
* Don’t provide personal financial information in an e-mail, over the phone, or to door-to-door fundraisers. Use a website like www.networkforgood.org to donate safely with your credit card to more than one million organizations. Ignore e-mail solicitations from organizations you don’t support.
* Write checks out to the charity’s exact name, not its initials. Some scammers use fake names that are similar to well-known charity’s names.
* Don’t be swayed by on-the-spot high-pressure tactics or sad stories. Ask for written information or check out the charity online first.
* While many representatives for charitable causes are genuine, be aware of swindlers who often pretend to represent causes for missing children, soldiers on active duty and veterans, firefighters and police, or whatever disaster is in the news.
Know your tax benefits
Your philanthropy may provide tax advantages.
* Tax-exempt organizations are not required to pay taxes.
* You can deduct donations from your taxes if you itemize.
* The IRS has a listing of tax-deductible organizations.
* The IRS now requires receipts for all tax-deductible contributions of $250 or more.
* You should use an independent appraiser when donating property worth more than $5,000. The IRS won’t take your or the charity’s word for it.
Consult your tax advisor for more help.
Reduce your solicitations
Many charities rent or trade their donor lists to other organizations to raise much-needed funds. As a result, you might get more requests in the mail the more you donate. The National Do Not Call Registry doesn’t apply to nonprofit organizations.
* Request that your information not be shared: You can send a letter, along with your donations, asking the recipient to refrain from renting, selling, or trading your personal information, name, or donation history to anyone. Or ask the recipient to limit its solicitations to only a few times a year. Explain that your future support is contingent on its cooperation. View and download a sample letter.
When your charity complies with your request, consider increasing your donations to reward it and to offset any revenue the charity may have lost from not renting your name.
* Additional requests from other charities: If you receive unsolicited address labels, note cards, pens, pads, or other gifts from charities, you are not obligated to make a donation in return. To stop receiving these mailings, return the charity’s envelope with a note requesting that your name be removed from its list. Be aware, however, that the organization might not be able to remove your name if it rented the list from a list provider.
* Handling in-person solicitations: Politely decline these solicitations by saying, “I limit my support to charities that I know well and support the causes that are most important to me.” Consider concentrating your support on singular missions, such as curing cancer, or on helping institutions in your hometown.
Become a stakeholder in the cause you support. You deserve to know how your money is used. With a little research, you can feel confident your donations are being used wisely to better the world.
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