Tis the Season to be Giving
Charities received more than $335 billion in donations in 2013, with the vast majority coming from private individuals. Americans are very generous people, and their spirit of giving soars during the holidays. Here are some tips to help ensure that your donation does the greatest good.
When in doubt, check it out. When an unfamiliar organization asks you for a donation, don't give without gathering details about the charity, the nature of its programs and its use of funds. Look for a review of the charity on BBB.org.
Think before you give. If you are solicited at the mall or on the street, take a minute or two to “think.” Ask for the charity's name and address. Get full identification from the solicitor and review it carefully. If you decide to donate, don’t give cash. Write a check made payable to the charitable organization.
Watch out for copycats. There may be hundreds of charities seeking support in the same category, and some may have similar sounding names. Don’t fall for a case of mistaken identity since your contribution to the wrong charity hurts the charity that you intended to help.
Giving later might be better. Never feel pressured to give on the spot. Legitimate charities will welcome your money tomorrow or even next week just as much as today. If the solicitor pressures you with intimidation or harassing phone calls, file a complaint with the BBB.
Don’t accept vague claims. Statements such as "all proceeds go to charity" or “your purchase will benefit charity” are too vague. Look for a disclosure that indicates the actual or estimated amount of the purchase that the charity will receive to fund its programs.
Unordered merchandise is free. If a charity sends you greeting cards, address labels or other merchandise with an appeal for donations, you are not obligated to pay for the items. These “free” items are funded out of the contributions received from donors.
Watch out for charity fraud. Legitimate charities do not demand donations; they willingly provide written information about their programs, finances or how donations are used; and they never insist you provide your credit card number, bank account number or any other personal information.
Donate toys, food or services. If cash is tight this time of year, consider donating food, toys, clothing or other items needed during the holidays. Volunteering your time is another option.
Consider the whole picture, not just finances. While financial ratios help in identifying cases of financial abuse, it’s a mistake to use them as the sole basis for making a giving decision. A good ratio does not necessarily mean that a charity is well managed, honest in its appeals, transparent about its activities and effective in achieving its mission.
Remember, not all soliciting groups are charities. If you want to take a charitable deduction for federal income tax purposes, make sure to verify the organization’s tax-exempt status.
Giving is an important role that consumers play, however donors should give with their head, as well as their heart.