How to Make Informed Decisions about Charitable Giving
It is officially fall. Along with the rush of companies who start their Christmas holiday ads and sales earlier and earlier each year, many of us start to consider making charitable contributions to those who are less fortunate so we can record the write-off on our year’s end taxes.
Many of us will become inundated with mail asking us to donate to a specific cause. We will receive offers of free gifts to entice our generosity and our donation forms will be pre-checked with a recommended donation amount. Isn’t that nice of them? And once you give to one organization, you will receive donation requests from even more charitable organizations. And if it isn’t mail solicitation, it will be solicitation by phone or a donation bucket placed on every counter no matter where you go.
Charitynavigator.org has some very useful information for those looking to make more informed choices about charitable giving. Along with top ten lists that provide statistics on which organizations have the lowest paid CEO’s, or the highest reviews and donations, CharityNavigator.org also provides some tips on helping us be, as they state, a more savvy donor. (The following is a reprint from CharityNavigator.org.)
Take the time to identify which causes are most important to you and the specific change you want to affect. Before making a contribution, talk with the charity to learn about its accomplishments, goals and challenges.
Never give out personal information over the phone. If you receive a call from an organization you would like to donate to, investigate them on-line and send your donation directly to the charity, thereby cutting out the middleman and ensuring 100% of your donation reaches the charity.
Don’t drop money into canisters at the checkout counter or hand over cash to solicitors outside the supermarket. Support groups granted tax-exempt status under section 501(c) (3) of the Internal Revenue Code.
Know that in most cause areas, the most efficient charities spend 75% or more of their budget on their programs and services and less than 25% on fundraising and administrative fees.
Spreading your money among multiple organizations not only results in your mail box filling up with more appeals, it also diminishes the possibility of any of those groups bringing about substantive change as each charity is wasting part of your gift on processing expenses for that gift.
How do you organize your charitable contribution slips? Please share your ideas with us. Here are a few tips we have to share.
Maintain a list of your contributions throughout the year. Include dates and amounts/items given. You can refer to this list as needed for budgeting, tax-time preparation, and to avoid any duplication in your giving.
Keep your list of donations and donation receipts with your yearly tax-related documents for easy tax preparation.
Select a day of the year and make all annual charitable contributions on that date. It is easier to remember to make your contributions at specific times of the year, such as a birthday or on a holiday.