‘Tis the Season of Giving.

Whether you prefer volunteering, dropping money in the bucket next to a Salvation Army bell ringer, or donating to charities, this time of year finds hearts and wallets open with kindness and generosity.

 But, if you’ve decided to gift a charity with a donation, do you know how to find a worthy one?

 Many people believe all charities work the same.

1. You donate money
2. They give all the money to the program they are funding
3. Everyone is happy

 Unfortunately, this is not true.

 There are both charitable nonprofit entities and for-profit entities.

 It’s essential to know the distinction.

 A nonprofit charity organization must be recognized by the IRS under section 501(c)(3), “organized and operated exclusively for charitable purposes.”

 A for-profit charity organization may fund a charitable mission, but it is still recognized as a profit-making corporation.

 It’s essential to know what kind of organization you’re donating to and where your money is going.

 The process of finding the best, as well as a legitimate charity, may seem daunting, which is why there are resources (charity watchdogs) to help navigate the over 1.5 million IRS-registered charities in the U.S.

 One such resource is Charity Navigator. Their searchable database can assist in finding a nonprofit charity that matches your preferences.

 Others to consider using are BBB Wise Giving Alliance, GiveWell, GuideStar, and Charity Watch. 

 However, if you want to take on the legwork – keep these things in mind.

 Before donating to a charity, make sure you research it

• Check its mission statement
  • It can usually be found on their website
• Why does the charity exist?
• What are its goals?

 Show me the money

Where is the money being allocated? A reputable charity should donate at least 70% of the money it receives through donations to its programs.

• Overhead?
  • Administration or employees?
  • Fundraising expenses?
  • Executives?

Since public charities are registered as nonprofits, their annual report is available to view –  and you definitely want to take advantage of this.

 What have they accomplished?

• Are they able to show you examples of their results?
• Are they meeting their goals?
• What are other donors saying about them?
  • Yes! Read customer (donor) reviews
• Do they keep in contact with you about their progress?

 Communication is important

• Are they keeping you apprised of the charity’s success?
• Do they send a copy of their annual report?
• Did you receive a thank you for your donation?

 Things to consider

• Are there hidden fees?
• Does the charity have tax-exempt status?
• Use a credit card on a secure website when making a donation to protect yourself
• Do not give personal and financial information over the phone, such as:
  • Bank account numbers
  • PIN numbers
  • Passwords
  • Social security number
  • Birth certificate/birth date
  • Address and phone number
• Stay away from wire transfers, prepaid debit cards, or gift cards

What’s a ‘soundalike’ charity?

• Be sure the name of the charity you want to donate to matches exactly
  • American Cancer Society vs. American Cancer Fund
  • Specific types of cancer – Breast Cancer Research Foundation vs. Breast Cancer Research

If you can’t find what you’re looking for, start your own fundraiser

• What are you passionate about?
• What are you willing to stand behind?
• What platform is the most used for starting your own fundraiser?
  • GoFundMe
    • Targets social media platforms
    • Users can create their own website – usually for personal causes and life events
    • It is a for-profit crowdfunding

Know that your generous gift is most appreciated. Every dollar helps make a difference. Donating to a charity is a wonderful way to make a positive impact –  just make sure you do so wisely.