Ensure That Your Donation Dollar Goes Far This Holiday Season

Ensure That Your Donation Dollar Goes Far This Holiday Season
Image: Pixabay
November 11, 2015

Smart consumers are always seeking value for money in their purchases, and that should be no different in regards to charitable giving during the holiday season. Unfortunately, some charities give a shockingly small percentage of donations to its advertised cause. Charities are increasingly involved in extensive awareness campaigns that require outrageous overhead, which can divert your money away from your chosen goal.

Here are some tips to make sure your donations are getting into the proper hands.

Research

Decide what causes are important to you: Are you passionate about saving the environment? Or are you more interested in feeding the hungry? Has a certain disease impacted a loved one? Whatever your interest, there is a charity out there that is working towards your goals.

Determine your scope: If you give to a national or international organization, your donation can be part of an effort that touches millions of lives. However, if you donate to a group in your community, such as a local soup kitchen, you can see the impact of your generosity up close.

Resources

Guidestar: This website contains tax records for millions of nonprofit organizations. The free component of the website will provide information on the charity's income, spending, mission, and executive salaries.

BBB Wise Giving Alliance: Associated with the Better Business Bureau, this service provides free reviews of thousands of national nonprofits. The group rates each charity on standards such as governance, oversight, effectiveness once every two years. Groups that meet the Alliance's 20 benchmarks are designated as a "BBB Accredited Charity."

Charity Navigator: This service focuses on financial health and transparency. It examines Form 990 tax records to determine how much of a nonprofit's income is used for expense like administration and fundraising. Charities are rated on an easily discernable four star scale. Additionally, Charity Navigator publishes a list of its highest- and lowest-rated groups, broken down by cause.

Red Flags

Consumers can be approached by organizations to make a contribution, by phone, email, or face-to-face. The more impulsive donator should be aware of scammers looking to take advantage of the generosity associated with the holiday season. From the Federal Trade Commission (FTC), here are some signs that you may be the target of a swindle:

  • Refuses to provide detailed information about its identity, mission, costs, and how the donation will be used.
  • Won't provide proof that a contribution is tax-deductible.
  • Uses a name that closely resembles that of a better-known, reputable organization.
  • Thanks you for a pledge you don't remember making.
  • Uses high-pressure tactics like trying to get you to donate immediately, without giving you time to think about it and do your research.
  • Asks for donations in cash or asks you to wire money.
  • Offers to send a courier or overnight delivery service to collect the donation immediately.
  • Guarantees sweepstakes winnings in exchange for a contribution. By law, you never have to give a donation to be eligible to win a sweepstakes.