By Nicole Bouchard Boles
According to the National Philanthropic Trust, 89 percent of American households participate in donating money; among them the average annual contribution is $1,620. If you’re considering making a donation to charity, good for you. But before diving into a contribution, you need to know your giving options and commit to a bit of homework beforehand. The goal of your monetary donations should be to maximize the effectiveness of every dollar contributed.
Top 5 Tips to Give Smart Donating money to reputable organizations is the best way to assist those in need. However, with more than a million charitable organizations in the United States, which one needs your help the most? Which organizations are the most efficient? Moreover, how do you know if all or most of your contribution will reach its intended destination?
Fortunately, there are ways to make intelligent decisions about giving.
1. Budget your donations – To do the most with your money, I recommend that you budget your charitable contribution in advance. I suggest focusing on one or two charities a year—if you don’t have a lot of resources to spread around, they’ll go further if you concentrate them. Decide on an annual amount or a percentage of your household income that you’re willing to donate—you can give in one lump sum, or spread your contributions out over the year.
2. Find a reputable organization – Start by exhaustively researching a charity’s legitimacy and program details. With the help of charity evaluator websites like the Better Business Bureau’s Wise Giving Alliance (give.org), you can verify a charity’s nonprofit status, find descriptions of the group’s programs and determine how much of your donation dollars reaches its intended purpose. One question you’ll want answered is: How much of your donation goes straight to a program or services (as opposed to administration and marketing)? A rule of thumb I like to use is that at least 75 percent of a donation must go toward core activities. Some nonprofits, like the American Red Cross (redcross.org) and the National Center for Missing & Exploited Children (missingkids.com) are able to steer ninety cents of every donated dollar to program.
3. Go straight to the source – One way charities can afford to do this is to cut out the middleman. Private companies that solicit contributions on behalf of charities (essentially operating like telemarketers, third-party websites or door-to-door solicitors) are paid for their services—sometimes up to 95 percent of each dollar donated, according to Charity Navigator. Avoid contributing through a third party; always give straight to the source.
4. Maximize your money – Look for ways to leverage your contribution through programs like workplace giving and matching donations from special sponsors. A number of companies have committed a 100% donation match from employees and retirees to reputable charitable organizations.
5. Record every donation – Whenever you are donating money to a 501(c)(3) tax-exempt charity, record each of your contributions. If you itemize, you may be able to deduct your charitable tax donations. You must keep written records and receipts of all monetary donations. Monetary donations of $250 or more will not be allowed as a tax deduction unless you have written acknowledgement from the qualified charity. There are limits specific to charitable contributions, so talk to your accountant or download Publication 526, “Charitable Contributions” at irs.gov
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Nicole Bouchard Boles, an expert in no- and low-cost philanthropy consults with companies, families and individuals on the best ways to incorporate giving into their everyday lives. She has been featured in Newsweek.com, the Los Angeles Times and heard on Martha Stewart Living Radio, Disney Kids and CBC Radio. Nicole is the author of How to Be an Everyday Philanthropist: 330 Ways to Make a Difference in your Home, Community and World – At no Cost, which has received accolades from President Jimmy Carter and Mary J. Blige. (Workman, 2009). Visit Nicole at www.nicolebouchardboles.com www.everydayphilanthropistblog.com and on
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