Giving to Charity is Great. But How Do You Pick One?

by Chris Birk on 14 December 2010 2 comments
Photo: Banalities

Although the declining economy has left many pinching pennies, thousands of Americans will still make charitable donations between now and year’s end.

The holiday season often provides grateful organizations with half of their annual donations. Most consumers give time or money to organizations that mesh with their personal passions or life experience. But it’s also important for consumers to make sure their hard-earned dollars are getting to those who need the help. Despicable as it is, charity scams run high this time of year as unscrupulous actors aim to take advantage of goodwill and holiday cheer.

Here are a couple avenues potential givers should explore when considering a charitable donation:

Find the Right Fit

Think about what’s important to you and where you want your donation to do good. There are charities big and small doing important work in all corners of the country, from community-based groups to national organizations. Maybe it’s whales. Or puppies. Or the working poor. No matter your outlet, make time to evaluate your desires and the corresponding missions and values of potential organizations.

Check the Credentials

You can launch a website in 10 minutes, so just because a charity has one doesn’t mean it’s legitimate. There are watchdog groups that monitor the fiscal health and overall financial impact of nonprofit groups. Two of the biggest hubs are GuideStar and Charity Navigator. Use these sites to start your search or run prospective organizations through their search engines. Viable, legitimate charities should be willing to frankly discuss their missions, their programs, and their finances. You can also search for charities through the Internal Revenue Service.

Most organizations will dedicate about two-thirds of their funds directly to their unique cause, although that number can vary a bit depending on the group’s focus. Anything that looks out of line with that general guidepost should perhaps raise some red flags. You have every right to inquire about how donations are funneled and how much of your contribution will go to pay salaries.

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It’s also important to note that a nonprofit group isn’t necessarily a charity, which means your monetary donation might not be tax deductible. Be sure to ask.

Prioritize Privacy

Be careful when it comes to using your credit card for donations. Make sure you’re using an organization’s protected website or just mail a check. Whatever the route, don’t just fork over cash. Be extremely wary of folks who go door-to-door.

Look for an Open Book

Charities are usually eager to share their stories with potential benefactors and volunteers. Well-run organizations will actively demonstrate their achievements and goals through a variety of outlets including:

  • A clear mission statement
  • Frequent updates regarding day-to-day activities through blogs, social networking sites, and other communication channels
  • Updates from a board of directors
  • An annual report detailing achievements, future plans, and other key information

Not every organization will have this suite of information. A neighborhood soup kitchen probably doesn’t have the resources to crank out round-the-clock Twitter updates.

Consider Giving Something Other Than Money

Writing a check isn’t the only way to contribute.

Many organizations also appreciate the volunteering of time, as well as things like food, clothing, meeting space, and other in-kind donations. You might also be able to volunteer your expertise — writers and designers can help pull together a newsletter, for example. Ask the organization what they need most to support their outreach programs and day-to-day operations.

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Marla Walters's picture

Chris, great post. I was disappointed when an organization we gave to sold our name/address to a mailing list business. Suddenly, we were swamped in requests. Because of that experience, I would ask the organization if they sell that information.

Chris Birk's picture

What a shame. But that's a great point to share with readers. I've noticed that colleges and universities are starting to do more of this, too, at least it seems. Definitely something to ask during the course of due diligence. Thanks a lot, Marla.