How to Find a Trustworthy Charity
Whether you'd like to donate to a charitable organization out of the goodness of your heart or because you need an income tax deduction (or a little bit of both), you want to make sure you choose a trustworthy one. You want one where you can be sure that your money will actually get where it's supposed to be going. It isn't always easy to do this, however, as there are always scam artists out there trying to make a quick buck off of other people's good intentions. Take some steps to make sure that your next charitable contribution goes to help the people, animals, land trusts, that need it rather than lining the pockets of the undeserving.
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Instructions
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Ask the charity's contact person if your donation is tax deductible, even if you are not interested in taking the deduction. If the organization is a true charity, the deduction will most likely be tax deductible. If the outfit is a scam or a for-profit company posing as a charity, then, it won't be tax deductible. There may be some legitimate causes that for some reason do not have that tax status, but this should be a red flag that will tell you you need to collect more information about the organization before agreeing to make a donation.
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Inquire as to what percentage of your donation will go towards the actual cause you're hoping to support. At least 60% of all funds raised should go towards the stated cause. If not, the overhead for this organization is way too high, which means that this "charity" is either remarkably inefficient or that someone, somewhere in this so-called nonprofit organization is actually making quite a hefty profit.
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Never agree to make a donation over the phone, unless you are the one who placed the call to the charitable organization. Telemarketers are frequently employed by scammers and fake charities.
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Do your homework. Check out not only the website of the charity itself, but also any press coverage it's received. If it is a legitimate organization, it should have received a certain amount of media coverage, and the media may indicate whether or not this charity is getting the job done in the manner it claims.
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Pick a local charity if possible. That way you can see for yourself firsthand evidence of your organization at work. You can even choose to bypass the middleman and make a direct donation to your local church, soup kitchen, animal shelter, public school, library, or other organization in need of a little financial help.
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Search the Better Business Bureau's Wise Giving Alliance website for any mention, positive or negative, of your charity. You can also check with other watchdog groups monitoring charities, groups such as the American Institute of Philanthropy, Charity Navigator, and Guidestar. Guidestar posts copies of the federal tax returns filed by each charity.
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Tips & Warnings
The IRS has a list of all registered charities (ones to which a contribution would be tax deductible).
Make online donations through an organization's website, not through any link you may receive in an email as this may be "phishing" for your financial information
Don't make a donation in cash -- use a check or a credit card, so there is a record of your donation
Never give out your credit card or personal information in response to a phone, e-mail or door-to-door solicitation as it may be a scam
Resources
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Comments
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great tips I like them.
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There is a charity rating service you can use online. Terri Jo Lorz.
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PACs (political action committees) are organizations whose donations are NOT tax-deductible because they do lobbying at the government level on behalf of the cause. A great example of this is the Human Rights Campaign, which fights for LGBT rights. In addition, there are some non-profits that have different arms; one of them might be an advocacy/education arm, which IS tax-deductible, and they might also have a PAC arm. Check to see which one you're donating to before dropping the money if it really matters to you. I think both tax deductible and non-tax deductible charities are worth giving to, the only difference is the way that the government decides how the organization is using the money.
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Great tips-#5 is the best advice-it is always great to see the money used locally.
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Thanks for the points. It is important to check things out before donating.
