The National Association of State Treasurers Foundation presents:
Tomorrow's Money for Today's Woman
Giving Wisely
Every year millions of people support nonprofit organizations to care for people in their communities, strengthen causes they feel strongly about, and reach out to people affected by disasters. Giving is a noble and generous act of caring and service. But what are some things to consider when thinking about supporting a charitable organization?
It is possible to give from your heart while still using your head. Before committing to volunteer time or donate goods or services to a local charity, or responding to pleas for financial support in the wake of a disaster, consider the following questions:
What type of causes do you want to support or what groups of people do you want to care for?
Do you have a particular concern for people with disabilities or children with cancer? Do you want to help victims of domestic violence or disadvantaged youth? Are you passionate about the environment or animals or education and the arts? Knowing what causes you want to help can make it easier to identify which organizations you may choose to support. Creating a plan to give to charities in advance of being solicited can help eliminate a lot of on-the-spot decision-making.
It can also help you determine which agencies or organizations you would like to support in response to immediate demands created by disasters.
Do you have a relationship with any charitable organizations?
Knowing people who work for, or volunteer with, a charitable organization can give you a personal connection to the organization and may help you feel more confident about where your money is going and how it is being used. Ask friends or family members who donate time or money about the charities they support and see if you think it would be a good match for your giving interests. You can also ask at your children's schools or in your workplace, and your public library can provide you with information on charitable organizations, including through your local Foundation Center collection. Personal references and a little research can help you get a feel for the activities that an organization undertakes, what results they have achieved to date, and what they commit to do with the resources given by donors such as yourself.
Research potential organizations and carefully evaluate requests for giving
Before you donate items, volunteer time, send a check or make an online gift, use the Internet to research potential charities. Websites such as Guidestar.org, and Give.org (the Better Business Bureau Wise Giving Alliance) offer a wealth of information on nonprofit organizations and things to consider before giving. As you review potential charities take note of:
The organization's mission statement. Is it in line with your vision for how you want your money to make a difference to the causes that you care about?
Is the organization a certified 501(c)(3) nonprofit organization? If you're not sure, you can call or email the organization and ask for a copy of their IRS Letter of Determination. According to the IRS, organizations receiving 501(c)(3) status are those considered "charitable, educational, religious, scientific, or literary; those that prevent cruelty to animals: and those that foster national or international amateur sports competitions." The tax-exempt 501(c)(3) status is granted only to organizations that provide detailed financial and organizational information proving it is organized and operated for charitable purposes as outlined by the IRS.
Does the organization disclose financial information? For example, do they have an audited annual report? Do they make their IRS Form 990 available to donors? Does the organization disclose what percentage of funds is used for direct programs and services versus overhead expenses, operating costs and fundraising expenses? You might consider requesting a copy of the organization's annual report and latest financial statements to see the activities of the organization and what percentage of funds are used for programs versus fundraising and administrative expenses.
Is this nonprofit organization accredited by or affiliated with any organizations? Nonprofits can demonstrate their credibility by working with other reputable nonprofit and even for-profit organizations, as well as by voluntarily meeting standards of accrediting bodies like the Better Business Bureau.
How will your donations be used? If you are donating goods or services, will they be used directly or will they be re-sold to raise funds for the organization? If you are donating money, will it be pooled in a general fund for operating programs and services? Or will your money be directed to a specific project?
If the organization is international and working to help in other countries, how is money I am donating here being used? Most international non profit organizations have US and/or other country based "affiliates" that comply with requirements for charitable giving so that donors can give money responsibly here to help victims in other countries.
What percentage of your donation will be used for overhead, administrative or fundraising costs versus going directly to meet the organization's stated project needs?
Who benefits from the work of the organization? If, for example, the organization serves youth, how many kids benefit, how do they benefit and is this a one time event or do the kids participate regularly? What you're looking for is results that the organization has produced with donations to date.
Who governs the organization? Do they have an independent Board of Directors? Do the members of the Board serve voluntarily or are they compensated for their service? It is best for Boards to be comprised primarily of independent, non-related members (i.e. no husband-wife or children of Board members) who are not employed by the organization. Preferably members of the Board will not be compensated for their service.
You should feel comfortable when talking to a representative of a nonprofit organization that they are not pressuring you to give: goods or services, your money or personal information they can use in the future. If you are uncomfortable about the conversation, feel free to ask that they mail you information (such as a brochure and their most recent annual report) before deciding to give, or politely say "no."
While you may receive requests primarily to support charities with financial donations, there are several ways you can be a part of a nonprofit's mission. For example:
You can donate needed goods (i.e. clothes, furniture, non-perishable food, etc.) or services (i.e. beauty services, legal services, writing, graphic design, medical care, volunteer time to make and serve meals, etc.) If the organization you choose to support is classified as a 501(c)(3), your donation may be tax-deductible, meaning that you can deduct a percentage of the donation's value from your federal income tax. Make sure that you receive a receipt so that you can itemize this charitable deduction on your tax return.
Donate benefits you may have accumulated such as frequent flyer miles, rebates or discounts.
Consider using a credit card that makes a donation to a specified charity for every purchase or transaction. You can research credit card options at Cardweb.com.
Contact your employer's human relations department to see if there's a company "matching program" to match employees' charitable donations.
For a special occasion such as a wedding, baby shower, birthday or holiday, consider asking friends and family members to donate to your favorite charity in lieu of giving gifts.
If you choose to give a financial donation, there are several ways to do that. You can:
make a donation online through the organization's website using your credit card or registering for monthly automatic deductions from the bank account or credit card of your choice,
write a check directly to the organization (never to an individual working for the organization), or
transfer stock or mutual fund shares.
"Planned giving" is another way to financially support a charity. With planned giving you create a plan to make charitable contributions both while you are alive and after your death. There is a wide array of ways to do planned giving, including charitable trusts, family living trusts, and annuities. It's always a good idea to work with a financial advisor before making such financial plans or commitments or planning to transfer stock or mutual fund shares.
Even though many people give cash, it is better to keep a record of your donations and proof that you gave to a particular organization, such as a cancelled check, email or credit card receipt. Keep your own record of the name of the organization you donated to, the amount of the donation and the date of the contribution. You should also receive a receipt from the charitable organization if the donation is over $250. The IRS does not require receipts for cash donations under $250.
How to Identify (and Avoid!) Charity Scams and Fraud
Unfortunately there are unscrupulous people and organizations that will attempt to raise funds fraudulently from you. And when a disaster strikes that affects a lot of people, it's especially important to make sure you know exactly to whom you're giving and what they are doing with your funds. Here are a few tips to identify and avoid fundraising scams and fraud:
If you get a phone solicitation for funds, ask for the exact name of the organization, the caller's title and/or relationship to the organization, and contact information where you can learn more about the organization (i.e. a website address, office address, name of other staff, etc.) before you make any donation. If the person is aggressive or obnoxious, thank them politely and hang up. Do not be rushed into making a donation before you are ready. Beware of any organization that offers to send a "runner" to collect your contribution.
Verify the exact name of the charity; following disasters, a number of fraudulent organizations may pop up with names similar to large, credible organizations. For example, during the aftermath of Hurricane Katrina, some websites were set up with the name Katrina in them, or imitated the name and look of more well-known and reputable relief organizations with the name in the title, but had nothing to do with aiding the victims. Also, some email messages may ask you to make a contribution but link you to a website that is actually entirely false, with the purpose of getting you to share personal information such as a credit card number, social security number, etc.
Most legitimate nonprofit organizations do not ever send out mass emails requesting funds. Beware if you receive an email of this sort. Check out the email address at the top of the message. Is it the exact address of the organization? It's better to go into your internet browser and directly type the name of the organization in the address bar to get to the site on your own rather than replying by using a linked address in an email.
If you are being asked to contribute for disaster relief, make sure the organization soliciting you has experience in disaster relief. Ask the organization to provide you with information that shows you how they deliver assistance to victims in need.
Do not give personal information or credit card number to an email solicitation nor to a telephone solicitor. Request that information be sent to you in writing on the mission, programs and finances of the organization before you make a donation.
If you're giving online, first make sure that the internet address of the site exactly matches the organization's name (you can go to an internet search engine like google.com or yahoo.com to verify) and then make sure that the portion where you are entering personal information is encrypted/secure. If it's not, consider giving through a secure online portal instead such as Networkforgood.org or Justgive.org.
Don't respond to forwarded e-mail requests or chain letters for donations. In fact, such emails may contain viruses that can hack into your computer so it's best to delete them.
Request written confirmation of the gift both by email (if donating online) and by regular mail.
If you get solicitations through the mail, read them carefully. In addition to getting details and information on the charity (i.e., its name, address, mission, leadership, etc.) be sure you know what they're asking for. Don't be fooled into feeling like you have to pay for unsolicited items sent to you in the mail such as keychains, address labels or notecards. Likewise you should make sure you're not being asked to "pay" for unsolicited appeals disguised as bills or invoices.
To reduce the number of phone solicitations you get at home, register your phone number on the national do not call list.
If you do not want to receive solicitations from a particular non profit organization, ask the caller to remove your name and phone number from their data base and/or write the organization and request they remove your name from their mailing list.
Giving to charitable organizations is an act of caring and kindness. By doing a little bit of homework and giving from your heart while using your head, you can enjoy knowing that your resources are supporting proven, trusted charities that are working hard to advance the causes you believe in and care for people in need.