Whether you’re planning to give to a charity over the holidays, or you’re simply planning ahead for tax time, the best time to check out a charitable organization is before you donate.
Donating Do’s and Don’ts
Be sure you are familiar with the charity you would like to help, exactly where your donation goes, and where it doesn’t go:
- Start with the name. Are you familiar with the organization, or is it simply a name that looks or sounds like a familiar charity? What’s the organization’s address and phone number? Does it have a website? Search the name through the internet, exactly as it appears or sounds, to learn more about the organization. Be wary about donating to any organization you’re not familiar with, and don’t let an emotional appeal guide your decision-making.
- What does the organization claim to do? Who does it claim to help—and where are the people the charity claims to help? (For example, whether a charity claims to aid homeless people, disabled veterans, or firefighters, are they local people?) How much of your donation goes to administrative costs or to professional fundraisers?
- Will the organization send you written information before you donate? If the answer is no or the solicitor tries to talk you out of your request for more information, that’s a red flag. And so is putting pressure on you to donate immediately. Resist pressure to give now and refuse the request.
- How do charity watchdogs rate the organization? Check with charitynavigator.org, (Charity Navigator), guidestar.org (GuideStar), give.org (the Better Business Bureau’s Wise Giving Alliance), or charitywatch.org (the American Institute of Philanthropy).
- Is the person asking for a donation a volunteer, a paid member of the organization, or is he/she a paid outside fundraiser? If the caller is a paid fundraiser, ask what percentage of your donation the fundraiser keeps, how much goes to the charity’s administration costs, and what percentage goes to the charity’s program services. Keep in mind that the law does not require professional fundraisers to forward a minimum amount of your donation to a charity. Consider “avoiding the middleman” by donating directly to the charity or to another charity if you’re not comfortable with the fundraiser’s tactics and answers.
- Is your donation tax deductible? Not all contributions to “tax exempt” organizations are necessarily tax deductible. Tax exempt means the organization doesn’t have to pay taxes. Tax deductible means you can deduct your contribution on your federal income tax return. You can check an organization’s tax status at apps.irs.gov/app/eos.
Tips for Giving Wisely
Once you’ve asked the important questions above, you’re clear about the organization, and you’re comfortable contributing:
- Ask for and save a printed copy of your donation. Keep a record of your donation for tax purposes.
- Pay by check or credit card (avoid using a debit card or prepaid money card), and request a receipt. Do not send cash, and don’t give credit card or bank account information to a caller you don’t know. If you donate using a credit card before the end of the year—even if you don’t pay your bill until after January 1—you can still itemize your donation on this year’s taxes.
- Be suspicious if a solicitor thanks you for a past pledge or donation that you don’t remember making—it might be a trick to get you to donate. Keep in mind that even if you did pledge money, you don’t have to follow through if you feel uncomfortable with the request.
- If you’re unsure about whether a solicitation request is legitimate, contact the charity to make sure the organization is aware of the fundraising effort. If you’re unsure about a solicitor’s claims that donations will help local charities, call local organizations or chapters to verify.
- Bottom line: Give generously if you can, but give wisely! Giving to a known charity you’re confident about is often the best option.