Getting the most bang for your buck is a badge of honor these days, whether you’re car shopping, choosing a college or just comparing loaves of bread. One area where you really don’t want to misspend your hard-earned dollars is charitable donations.
There is no shortage of nonprofit organizations competing for contributions, but quality and effectiveness vary significantly, so you should do a little research before donating your time or money. Here are a few suggestions:
Pick the right cause. Many people prefer to support organizations that champion issues close to their heart, whether it’s feeding the hungry, environmental protection or working to cure a disease. Also consider whether you want to target local organizations or prefer a more national or global impact.
Familiarize yourself with their operations. Study the organization’s website and annual report. Speak to staff members or volunteers, or volunteer there yourself. Or, if you know someone who has used their services, ask for impressions of the organization.
Do your homework. In these tough times, many non-profits are experiencing increased demand for services in the face of declining contributions and government funding. Avoid charities that spend heavily on salaries, advertising, fund-raising and other administrative expenses (sometimes misreported as “program development,” “public education” or other euphemisms). Ideally, at least 75 percent of contributions should go directly to beneficiary programs.
Several online rating services can help with your research: Charity Navigator (www.charitynavigator. org) or GuideStar (www2.guidestar.org). The Better Business Bureau (www.give.org) rates whether organizations have met its standards of accountability, including ethical conduct and honest solicitation practices.
Be on fraud alert. Unfortunately, some unscrupulous people and organizations will take advantage of your desire to help others – if you let them. A few tips: Ask for a copy of the organization’s IRS Form 990, which details how contributions are spent. Be suspicious of telemarketing and email solicitations. When in doubt, contact the organization yourself. Be aware that scammers often choose names similar to those of legitimate organizations. Never give out personal or credit card information unless you initiate the contact.
More people than ever need
our charitable assistance. Just be sure you’re contributing to organizations that can do the most good.
Jason Alderman
www.practicalmoneyskills.com
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