With the holidays here, many of us are swamped with requests for donations to various charitable organizations. Our social media, tv, email and so many other outlets are filled with the pleas for us to give, give, give. For many people, charitable donations are one of the top financial priorities, along with saving for retirement or their kid’s college funds.
But how do you know if the requests are coming from a valid charitable organization? Here are a few things to check out before you give your support to that kid knocking on your door or the person ringing a bell outside the grocery store:
1. Choose a charity whose mission you know and understand
Most every legitimate charity or non-profit society will have an online presence. Check out their website and review their mission and vision statements to see if it is a cause that speaks to you, that you believe in and are willing to support. Any charity that is above board will publish their financial statements or make them available for your review if you chose to ask. They will publish an annual report that shares their income and expenses with an overview of the year’s accomplishments. Many will also post in depth articles about their operations and how they have helped others or achieved their goals.
If it’s a neighborhood non-profit or a nationwide organization with programs in your neighborhood, you can volunteer your time to see some of the programming at work
2. Make certain it’s a genuine, trusted charity
Before you give away cash or goods, research the charity. Be specific that the charity is genuine. Several agencies supply information to aid you review the operation of charities.
In the US you can confirm that it is a tax-exempt organization, check their 501( c) 3 standing registered with the Internal Revenue Service’s exempt company database. If you intend to claim your contribution on your federal taxes, a US charity should have 501( c) 3 status.
The Internal Revenue Service supplies tax obligation tips for donors, so check out their website for more info.
In Canada you can check on Canada.ca for information about charities registered with the CRA. Their website also has some great tips for charitable donors. https://www.canada.ca/en/services/taxes/charities.html?request_locale=en
If you don’t find anything on the national level websites, you can check with your local town or municipal officials for any information they may have about charities or non-profit societies operating near you. The Better Business Bureau may also have information on local organizations and possibly records concerning just how these charities use their funds.
3. Determine exactly how your contribution will be used
If your chosen charity does not publish financials, you can check out an online charity review organization to get an unbiased review. Charity Intelligence, Charity Navigator, and Charity Watch are a few of sites that will give you information on a variety of charities, their goals/accomplishments and a review of the charity’s monetary wellness and spending plan breakdowns. You may have to search a little sometimes for a watchdog that has info about your chosen charity, but most of the review sites have information about the larger charities.
Be skeptical of a charitable organization that does not have any financial information available thru any sources.
The normal charity spends 75% of its spending plan on programs, according to Charity Navigator. Look for non-profits that hit or go above this 75% spending on its programs. The rest of a regular charity’s budget is most likely to management expenses (15%) and fundraising (10%).
Charity watchdogs will also provide an evaluation of the charitable organization’s effectiveness of their operations and the success of their programs. Be sure to evaluate the impact of the charity’s job. While every charity will claim they are changing lives and having an effect – it is always a good idea to have an independent opinion on this.
Give Well does in-depth study on programs that it feels have had a positive effect on individuals’ lives and suggests a handful of charities it considers best at supplying these programs. It likewise suggests inquiries that you should ask a charity to evaluate whether the organization is in fact “doing excellent” and having a measurable effect.
4. Types of Donations – Other than Money
Many charity organizations will take donations of things other than money. Their websites will clearly explain their policies for non-monetary donations. Clothes, furniture, household goods, vehicles (cars, trucks etc.) artwork, jewelry, recreational items, and sports gear, etc. Some will also be able to accept stocks, bonds or even a real estate donation!
The worth of some of these items might require a professional assessment if you are expecting to get a tax receipt for your donation.
5. Charity Funds
If you don’t have time to do the research study and also can’t determine which charity to pick, you can still make a tax-deductible charitable payment to a donor-advised fund. These organizations have done all the research on the charities they engage with, so you can feel confident in your donations. A couple of Canadian charity fund organizations are My Charity Fund and Canada Helps. https://mycharityfund.ca/
6. How to protect yourself
For the most part, charity scams are just like any other scam. They show up in your email, on social media posts, crowdfunding platforms, phone calls and texts, and so on.
Be wary of being asked to make your donation via gift cards, money orders or wire transfers (like Western Union) or even sometimes by email or etransfer. A charity that won’t accept anything other than cash is also suspect.
Don’t click links or open email attachments from someone you do not know, go to the charity website directly in your browser or thru a google search.
Notice the site’s address, most genuine charity internet sites use ‘.org’ – not the ‘.com’ extension. Recognize fakes and copycat names that are similar to trustworthy organizations, offer only to established charities or groups whose work and information you know.
Look in the headers on the email to check the email address to see if it is legitimately from the charity.
Do not supply any kind of personal information or details in replies to an email, robocall, or robotext. Just like the IRS/CRA will not call asking for your personal information – a charity won’t do this either!
Don’t succumb to high pressure tactics such as advising you to contribute NOW. A genuine charity will never pressure you to donate.
Beware of charities that are offering ‘gifts’ or other incentives if you donate. While sometimes this is a legitimate thank you, many times it is not.
Beware of online donation forms that are actually subscriptions. You could unwittingly sign up for a regular monthly donation when that was not your intention.
Report Fraud or Scams
If you are a target of fraud or a scam, or have information regarding these kinds of plans, please report to your local authorities. Depending on the scale of the fraud or scam it may need to be reported to a state or federal agency.
Thanks for reading this article, as you can tell I am passionate about giving to solid reputable charities and encourage others to do so too. A good charity does so much in service to our world and we should feel comfort in knowing that our donations, even small ones, go a long way to creating good outcomes and helping others.