There are thousands…no, make that millions of non-profit organizations in the United States and abroad — and each of them would like nothing better than to get you to donate. Donating to charity can certainly be an uplifting and rewarding activity. But considering that roughly 75% of Americans contribute nearly $250 billion dollars to at least one charity, wouldn’t it be nice to know that your money is being used correctly and for something worthwhile, and not paying for some CEO’s timeshare in the Bahamas? When it comes to modern-day philanthropy, these days it pays to be smart.
According to the Giving USA Foundation (www.givingusafoundation.org) there are some fundamental guidelines to make sure-organization is the right match for your heart…and your checkbook.
– Follow your heart: Take a second and consider what causes are important to you. Is it finding a cure for cancer? Providing inner-city kids with an opportunity to go to museums? Eliminating hunger in third-world countries? The list of non-profits is longer than your arm, and each would have you think that their cause is the most important. When it comes to smart philanthropy, at the end of the day it’s your money being spent, so pick the non-profit agency that will give you the most satisfaction. A good resource to help is www.guidestar.org which provides a comprehensive database of non-profit organizations.
– Do your research: Congratulations, you’ve decided to donate to a charity that provides paper and pencils to children who live in the desert. Now get the facts. Many agencies post their annual reports which should include a mission statement, the number of individuals the organization has actually helped and more. Smart philanthropy involves a bit of legwork in order for it to be worthwhile. Grassroots organizations like www.charitywatch.org and www.charitynavigator.org look for measurable information that sheds a light on how many non-profit organizations actually spend its money.
– How is your donation spent? This is really a sub-topic of the “research” mentioned above, but no less important. According to the Better Business Bureau’s Charity Reports (www.give.org) a charity should spend at least 65% of its money on programs and services and the rest on fundraising and administration costs. That percentage fluctuates depending on the agency. For example — organizations engaged in scientific research may have higher overhead costs for material. The solution — look for an organization with a similar mission but where more of the money raised is spent at the grassroots level.
– Think “leverage.” Maybe it’s financially wiser for you to donate on a monthly basis with a small amount and see how it affects your budget. Maybe your workplace has a donation program in place that you can get involved in where the company will match your donation dollar-for-dollar. Maybe your donation to charity can take another form altogether like volunteer work. Again, smart philanthropy is a noble thing, but you don’t want to donate so much that you turn yourself into a charity as well.
– Don’t forget your deduction: If you donate to charity, make sure that you do by December 31st so you can enjoy a current-year tax deduction. To determine if your charity is recognized by the IRS, visit www.irs.gov/app/pub78. Also be sure to keep old receipts or cancelled checks.
The gift of giving is one of the most worthwhile activities you can be involved in. You don’t have to be on par with Paul Newman and donate millions to reap the same satisfaction of knowing your charitable donation is making a difference. Think smart philanthropy and make sure that however you donate; your dollars are being used in the most efficient way possible.