Giving to charity is as American as apple pie. U.S. News and World Report in fact ranks the United States as the most generous country on earth1. However, there are some unscrupulous actors out there so before you give, take a few points under consideration.
First, there are many scammers more than willing to take advantage of charitably inclined donors. They may use names that sound similar to well-known major charities that adds to the confusion. Avoid giving through email links or over the phone as these can be fraudulent, especially if you feel pressured to give right then and there. Legitimate charities are happy to receive your donation at any time. It is a wise idea to always check to see the group you want to support is in fact a charity. A good resource is Charity Navigator2 that screens and rates charities. While not exhaustive, it is a good resource to start your research.
Besides the good feeling of helping others, a motivation for many to give to charity is the tax deductibility. Were you aware not all gifts qualify for tax deductions? The first thing to check for is if the organization is set up as a charity. Just because you donate to a group, it does not mean that it is a charity for tax purposes. The key term to look for is 501(c)(3) which signifies an organization’s charitable tax status. Legitimate charities often will display this openly. If not, you can also check an organization’s status directly with the IRS via their website3.
Another point to evaluate before giving to an organization would be how much of donations actually go towards charitable causes. It would be naïve to expect a charity to donate a hundred percent of donations. As with any organization, there are overhead costs to pay staff and do fundraising. However, as a donor you may not want these costs to exceed the amount given towards charitable initiatives. You can do some research on the organization’s website, or ask a representative to provide this information. Again, proper charities will not shy away from providing this information.
While doing some research and due diligence may take some time, it is well worth it to know that the organization you are supporting, is doing what you want to support.
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