Is Your Favorite Charity Ripping You Off?
You decided to donate to your favorite charity but how do you know it's legitimate? After all, there are at least 1.4 million charities to choose from and not all are reputable. You want some guarantee that your money is being used for what you intended it for. Experts agree that a legitimate and efficient charity should be using at least 50 to 60 cents of each dollar it receives to conduct the actual charitable work and use the remaining funds to pay for administrative, marketing and other operational expenses.
To find out how efficient a charity is, you start by checking out the organization with the local charity registration office and with your local Better Business Bureau.
You can also check to see the amount of your dollar that goes directly to charitable work on that organization's required annual Form 990. Charities and foundations are required to complete this form once a year and this information must be made available to potential donors upon request. Many forthcoming charities actually post their financial information on their Web sites.
The specific information on these forms and in a charity's annual report gives you a good idea of how the charity works, who governs it and where and how it spends money to address its concerns and run its operation. In these reports, you should be able to see the major expense categories, including program services, management/operation and fund raising such as:
Making Donations
After you have done your research and verified that your favorite charity is reputable, you are ready to donate. There are several ways to make a donation. You can donate by check. Make the check payable to the charity and not to the solicitor. You can bequeath funds or land as part of your will. To do so, you will want to discuss this with your attorney and with the gift officers from the organization to which you want to give. You can donate products such as computer equipment or used cars.
Internet Resources
There are over 1.4 million charities in the United States. The internet is a great resource to evaluate charities and help you decide which groups you want to give to. Some of my favorite websites are:
When we volunteer our time, our money, or our talents, we help make the world a better place for everyone. When you give from the heart, your experience is deeply rewarding and you feel good about yourself. When you give, everyone wins.
To find out how efficient a charity is, you start by checking out the organization with the local charity registration office and with your local Better Business Bureau.
You can also check to see the amount of your dollar that goes directly to charitable work on that organization's required annual Form 990. Charities and foundations are required to complete this form once a year and this information must be made available to potential donors upon request. Many forthcoming charities actually post their financial information on their Web sites.
The specific information on these forms and in a charity's annual report gives you a good idea of how the charity works, who governs it and where and how it spends money to address its concerns and run its operation. In these reports, you should be able to see the major expense categories, including program services, management/operation and fund raising such as:
- Program service costs - Research grants made to scientists, food sent to feed hungry families or public information brochures aimed at explaining a disease
- Management/operational costs - Expenses associated with the day-to-day operation of the charity, including rent, office supplies and salaries of administrative staff
- Fundraising costs - Printing and mailing of appeals, advertising and fees paid to professional fund-raisers
Making Donations
After you have done your research and verified that your favorite charity is reputable, you are ready to donate. There are several ways to make a donation. You can donate by check. Make the check payable to the charity and not to the solicitor. You can bequeath funds or land as part of your will. To do so, you will want to discuss this with your attorney and with the gift officers from the organization to which you want to give. You can donate products such as computer equipment or used cars.
Internet Resources
There are over 1.4 million charities in the United States. The internet is a great resource to evaluate charities and help you decide which groups you want to give to. Some of my favorite websites are:
- www.give.org. The Better Business Bureau Wise Giving Alliance helps donors make informed decisions about the different charities you may be considering. The Alliance doesn't rank charities but provides lots of information you can use.
- www.charitynavigator.org. Charity Navigator monitors and evaluates the financial health of charitable organizations and reports trends in the industry. It is America's largest independent charity evaluator.
- www.irs.gov. This is the Internal Revenue Service website. Review Publication 526 (Charitable Contributions). Publication 526 explains how to claim a deduction for charitable contributions. It discusses the types of contributions you can deduct and what records to keep.
When we volunteer our time, our money, or our talents, we help make the world a better place for everyone. When you give from the heart, your experience is deeply rewarding and you feel good about yourself. When you give, everyone wins.
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