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Essential Tips on Becoming a Smart Charitable Donor

Becoming a charitable donor has a lot of advantages. You get the advantages of feeling good about making a difference as well as the opportunity to receive tax deductions. Your charity gets the benefit of the money it needs to keep on supporting its cause. However, you should not send your life savings to the first charity that comes knocking. Here are some tips on becoming a smart donor to allow you to make the most of your money.

First, be proactive about your giving. Do not donate on an impulse to the first organization that asks. Figure out which causes are most important to you and think about the changes that you want to see in your community and/or the world.

Second, avoid the middleman. Telephone for-profit fundraisers are always going to take a large portion of your donation for yourself for starters. Second, it is not safe to give personal and financial information over the phone. If you like what you hear, take the information down, and then research the charity yourself. If it still stands up under scrutiny, you can donate directly to the charity, insuring that they receive all of the money that you donate.

Watch out for charities that sound similar but are not the same. Different groups may have names that sound similar, making it very confusing to a donor that is not up to date on information. A low-rated charity or a scam may intentionally make their name similar to a nationally known charity in hopes of getting your dollars. Make sure that your charity has 501 (c) (3) status. Giving money in canisters or solicitors on the sidewalk does not allow you to use it as a tax deduction and allows scammers to take advantage of you. Only support groups that have a tax-exempt status under the 501 (c) (3) status.

You will also want to know what your charity will do for you. When you donate to a charity, there is a good chance that you do not want your name and address sold to every other charity that is willing to pay for it. Look for charities that are willing to keep your information private and will not sell or trade your information.

Another smart financial decision is to get copies of the financial records of the charity. The most efficient charities will spend at least three quarters of their budgets on the programs and services they provide and less than a quarter of it on fundraising and other administrative fees. Looking over this information will also give you an idea of whether or not your charity can sustain its programs over time. Not only will the documents themselves make you feel more comfortable, but their willingness to provide it will also help establish their trustworthiness as a charity.

Also check and see what the top leaders in the charity are making. They need to receive enough compensation to guarantee that they get the talent they need to make their charity run properly. However, you have to make sure that they are not lining their pockets with money that you intended to support your cause. Compare the CEO’s salary with the overall performance to make a decision as to whether or not they are worth their pay.

Talk to your charity about the results of their programs, as well as the goals and challenges that they face. If they are unwilling or unable to do so, they are probably not a good choice for your donation.

When making donations, it is better to concentrate your giving on a few select causes. Spreading your money too thin will make you more of a target for junk mail, as well as reducing the actual amount of change that your donation will be able to affect.

Lastly, look for a charity that you can support for the long run. Make sure that the charity knows of your intention as well so that you and the charity can work as partners to bring about the changes the two of you are looking for.