How to Choose the Right Organization for Your Charitable Donation

 

David Bakke is an author and personal finance enthusiast residing in Atlanta. He shares his best tips for money management and giving back to the community on the blog, Money Crashers.

As of 2011, there were well over one million tax exempt charitable organizations operating in the U.S. The prospect of combing through that list to find the one charity that best sums up your beliefs – and where your money can do the most good – is a daunting task. It’s important to conduct the appropriate research to ensure your charitable dollars are going to the right place, but there are easier ways to find the right match than looking for that needle in a haystack. If you’re currently struggling to find the proper charity for your dollars, here are five things to consider:

1. Use Reputable Online Resources
When conducting research online, always stick with unbiased and reputable websites. If you want to learn more about a specific organization, that organization’s website may not be the best place to get it, as it’s more than likely going to present only positive information.

In addition to finding unbiased information, another challenge is finding accurate information. Many of the websites that aggregate lists and manage databases may be out-of-date or just plain sloppy. Instead, research your favored charitable organizations at the Better Business Bureau’s website or at the website CharityNavigator. Both are great resources for finding the right organization for you.

2. Make Sure the Organization is IRS-Approved
When you give money to a charitable organization, you do it to help people in need. However, you don’t want to get left out in the cold when tax time rolls around. Make sure the charity you donate to is approved by the IRS as tax-deductible. You can obtain a full list of all approved organizations from the IRS website.

3. Investigate Administrative Costs
Another thing to look at when choosing the right charity is its administrative budget. According to the American Institute of Philanthropy, administrative costs should be 40% or less to ensure a healthy charity, but you can certainly find lower than that. For example, according to the BBB, the administrative costs of The Salvation Army as a percentage of total revenue in 2010 were just slightly over 10%.

4. Contact the Organization
It’s perfectly acceptable to contact the organization in person to find out more about where your dollars are actually going. You can learn the details of how funds are dispersed, the specifics of who is helped and in what time frame, and you can also try to suss out if the organization is actually a charity or more of an advocacy group. Of course, there’s nothing wrong with donating to an advocacy group, but if the organization in question is one, your money may not go directly to those in need.

5. Review the Privacy Policy
Be sure to review the privacy policy of any charitable organization that makes your shortlist. If they sell or provide your personal information to third-party organizations, and that’s a problem for you, stay away. Also see if they have a general policy of releasing donation information to the public, and make sure that’s something you’re comfortable with before signing that check.

Final Thoughts
Once you’ve decided on an organization, remember to follow the letter of the law regarding your tax deductions for charitable donations. Anything over $250 requires a receipt, and make sure your documentation is bullet-proof. If your donation is non-cash, such as old household items or clothes, clearly list every item in detail and be sure to value them accurately. For a complete list of the rules and regulations concerning charitable contributions, check out the IRS Publication 526. Donating is a great way to both give back to the community and lessen your tax burden, but only if you do it by the rules.

The Salvation Army is a responsible steward of generosity in your community. According to The New York Times, the organization is “widely considered exemplary among nonprofits in handling cash collections.”  You can be sure that 82 cents of every dollar The Salvation Army spends goes directly to support community service programs – far exceeding the Better Business Bureau’s guideline of 65 percent. Consider choosing The Salvation Army for your next charitable donation, especially as Emergency Disaster Services (EDS) crews of The Salvation Army continue to meet the needs of natural disaster survivors from coast to coast. Visit https://donate.salvationarmyusa.org/ to make a donation online. You can also call 1-800-SAL-ARMY to make a donation over the phone or text “STORM” to 80888 to make a quick $10 donation via your mobile phone.

How do you choose where to make your charitable donations?

2 Comments on “How to Choose the Right Organization for Your Charitable Donation

  1. This is a very good tip especially to those fresh to
    the blogosphere. Short but very accurate information… Thanks for sharing this one.
    A must read post!

  2. It’s truly very complex in this busy life to listen news on TV, thus I just use internet for that
    purpose, and take the hottest information.

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