Donating to charity is a great way to support causes you care about. However, it’s important to make sure your donation goes to a legitimate organization that will use the funds responsibly. Here are some tips on the safest ways to donate to charity:
Research the Charity
Before donating, thoroughly research the charity to ensure it is reputable. There are several resources to help verify a charity:
- Check the charity’s website for information on their mission, programs, leadership, and finances. Look for transparency about how they use donations.
- Search the charity’s name on the IRS website to find their 990 tax form. Reputable charities file these yearly.
- Visit charity review websites like Charity Navigator, GuideStar, or CharityWatch to see ratings and reviews.
- Check with state charity regulators to see if the charity is registered and if any complaints have been filed against them.
Legitimate charities will provide details on their activities, show financial statements, and have minimal complaints. Be wary of charities that provide vague information about their programs and finances.
Give to Established Charities
Stick to well-known charities that have been around for a long time. Long-standing charities tend to have more financial stability, wider name recognition, and proven track records. Some examples of larger charities include:
- American Red Cross
- Salvation Army
- United Way
- Feeding America
- St. Jude Children’s Research Hospital
While new or small charities can also do great work, well-established charities have more public information available to assess their reputation.
Consider Local Charities
In addition to national charities, consider donating to local charities in your community. Benefits of local charities include:
- Ability to see the charity’s work in person
- Develop relationships and volunteer
- Fund programs that directly impact your neighbors
Research local charities through your regional association of nonprofits. Your local United Way chapter can also refer reputable local organizations.
Understand How Your Donation Will Be Used
Before donating, ask the charity how your donation will be used. Many assume donations go directly to aid recipients. But charities have varying expense structures. Some key questions to ask:
- What percentage goes directly to programs vs. overhead?
- Are donations earmarked for a particular initiative?
- Will my donation support recipients locally or internationally?
This information can help you choose a charity that aligns with your preferences on overhead expenses, geographic focus, or supporting specific campaigns. The charity should be transparent about how they utilize donations.
Consider the Charity’s Effectiveness
Beyond financials, look at what the charity accomplishes with donations. Check their:
- Results and impact achieved
- Programs and interventions used
- Effectiveness relative to peers
Charities focused on data, evidence, and evaluation tend to have greater impact. Review annual reports, external evaluations, and third party rating sites to find this information.
Choose Your Preferred Donation Method
You can typically donate to charities using the following methods:
| Method | Pros | Cons |
|---|---|---|
| Online | – Convenient – Can set up recurring gifts – Provides donation receipt |
– Less personal – Security risks with poor website security |
| Text | – Quick and easy one-time gifts | – Typically limited to smaller amounts – May get added to marketing lists |
| – No online security risks – Can include personal note |
– Slower processing time – Risk of mail getting lost |
|
| In person | – Develops personal connection – Can see programs in action |
– Usually one-time gifts – Limited to local charities |
Consider convenience, security, flexibility, and personal connection when choosing a method. If donating online, ensure the site is secure.
Maximize Tax Benefits
Take advantage of tax incentives for charitable giving to increase the impact of your donation. Ways to maximize tax benefits include:
- Itemize deductions – Itemizing allows you to deduct charitable donations if they exceed the standard deduction.
- Donate appreciated assets – Donating stock or property you’ve gained value on provides a tax deduction for the full appreciated value.
- Donor-advised funds – These provide an immediate tax deduction and allow you to make grants over time.
- Legacy giving – Charitable bequests in your will or estate provide deductions for heirs.
Be sure to maintain receipts from the charity documenting your tax-deductible donations.
Spread Out Donations
Rather than donating one large sum at the end of the year, consider spreading donations over the year. Benefits include:
- Charities have funds available all year when needs arise
- Can maximize tax deductions by donating small amounts each month
- Ability to regularly evaluate charities and reallocate donations
- Dollar cost averaging your donations over the year
Monthly recurring donations are an easy way to consistently spread out giving.
Designate Your Donation
Many charities allow you to select how your donation is applied. You can designate that your gift:
- Go to a specific program or campaign
- Be unrestricted to go where needed most
- Support recipients locally, nationally, or internationally
Restricting donations allows you to have more control over use of funds. Unrestricted donations give flexibility to charities.
Volunteer Your Time
In addition to financial donations, consider volunteering your time. Benefits include:
- Enables you to see first-hand how the charity operates
- Builds deeper relationship with the cause
- Leverages your skills and talents to directly help
Many charities need volunteers just as much as monetary support. Look for volunteer opportunities that match your interests and abilities.
Avoid Questionable Fundraising Appeals
Use caution with donations in response to questionable fundraising appeals, such as:
- Phone or mail solicitations from unfamiliar charities
- Door-to-door solicitors without proper identification
- Expired medical appeals suggesting funds go to individuals
- Disaster relief from newly formed charities
Sad stories don’t necessarily mean a charity is legitimate. Verify credentials before providing payment information or sending cash.
Spread Out Your Support
Consider supporting a variety of different charities over time. This allows you to:
- Support multiple causes important to you
- Adapt giving as charitable needs change over time
- Avoid concentrating power in a few large charities
Diversifying donations promotes a robust charitable ecosystem.
Conclusion
Donating to charity allows you to make a positive impact on issues you care about. However, you want to ensure your donation is used effectively by a reputable organization. Do thorough research on charities, avoid questionable appeals, and use financial strategies to maximize your giving. Evaluating results and spreading donations across causes further helps increase your impact. With appropriate due diligence, you can feel confident your donations are put to good use.