In my previous post, I addressed the reasons that individuals decide to give to charities. Once you have made the conscious decision to give, how do you make sure your contributions are making a real difference and not just funding the salaries of the organization’s executives?
The internet makes it easier than ever to do your own investigating. By doing your own due diligence, you can make better decisions about which charitable organizations most deserve your hard-earned dollars. Here are a few things to look for:
- Look for IRS-Approved Charities – Verifying that a charity is an IRS-approved nonprofit organization will not only ensure that your contribution will be tax deductible, but IRS-approved charities have stringent application and reporting requirements, which generally weeds out those organizations that are ill-intended.
- Look at the Financial Strength and Practices of the Charities – Web sites like Charity Navigator (also a tax-exempt charity) rates over 3,000 of the largest charities by looking at their financial practices (revenue spent on executing programs and services, overall financial strength, etc.). You may have to dig a little deeper on the web to get information on smaller charities. Your local United Way may be of assistance with local charities.
- Look at the Programs and Services Provided by the Charities – The name of the charity itself may not define the scope of the programs or services provided. Be sure you understand whom the organization serves and how they serve them. This way you can make sure you are supporting the cause you are aiming to support.
Once you’ve narrowed down your list of high-quality charities that satisfy your desire to give, you need to put together an annual giving plan. Watch for my next post where I discuss how to put together such a plan.
Changes in tax laws may occur at any time and could have a substantial impact upon each person’s situation. Please discuss tax matters with the appropriate professional. Any opinions are those of Center for Financial Planning, Inc., and not necessarily those of RJFS or Raymond James.