How to Donate to a Good Cause

With so many worthy causes vying for your dollar, choose one or two that are near and dear to your heart. Has a loved one suffered from breast cancer? Are you a nature or animal lover? Is education or social welfare your passion? Once you've chosen a cause, there are excellent resources available to help you choose an organization that will make the most of your donation.

Things You'll Need

• Financial information about charities
• Mission statements

Instructions

1. Visit Give.org, the Better Business Bureau (BBB) Web site on charitable giving, to find reports about specific charities. The BBB provides financial information about charities and evaluates them using specific accountability standards.

2. Contact your state attorney general's office or a local branch of the Better Business Bureau for information if a charity is not reviewed at Give.org.

3. Check that the charity is a tax-exempt organization and that donations made to it are tax-deductible. Donations made to tax-exempt organizations are not necessarily deductible.

4. Visit the charity's Web site or call it directly. Find out as much as you can about its history, programs and recent accomplishments.

5. Review what percentage of the charity's annual budget is spent on its actual mission versus fund-raising and administrative costs. Give.org recommends that a charity spend at least 50 percent of its budget on its mission, and no more than 35 percent on fund-raising.

6. Evaluate the mission of the charity and its effectiveness in fulfilling its mission. For those organizations that operate in other parts of the world, particularly the Third World, look for partnerships between the organization and the local population for most effective use of resources and the highest degree of success.

7. Confirm that the charity will appropriate your donation according to your wishes and not put it in a general fund.

8. Make your donation with a check. Never send cash.

9. File the canceled check and the charity's receipt as proof of your donation for tax purposes.

10. Consider other types of donations. Many organizations accept gifts of equipment, even vehicles. See How to Donate Your Car.

Tips & Warnings

• An organization need not be a charity to receive donations. Schools, cultural programs and political groups all rely on donations of money and time.

• If you want to further review the charity, ask it to provide you a copy of its recent annual reports and its Internal Revenue Service Form 990 (which details annual fund-raising and spending).

• Charities are required to supply a copy of their IRS Form 990 upon request. Some may charge a photocopying fee.

• If the organization is new and lacks a financial record, request information about budgets, fund-raising goals, a list of its board of directors and its mission statement.

• If your gift is going to be sizable, consider forms other than a straight donation, and get legal and financial advice (see How to Give Away Your Fortune).