Americans are givers. In fact, in 2016, charitable giving increased, according to a 2017 survey by Giving USA. Individuals gave $281.86 billion dollars to charity in 2016—an increase of almost 4%.
Aggie Sweeney, CFRE, chair of Giving USA Foundation and senior counsel at Campbell & Company, is quoted as saying that Americans are increasingly generous. “We saw growth in every major sector, indicating the resilience of philanthropy and diverse motivations of donors,” she said.
Americans who donate to charity want to know where their dollars are going. In a survey from US Trust, 89 percent of donors said that “it is important that the organization spend only a reasonable amount of their donation on general administrative and fundraising expenses.” Of course, an organization has necessary administrative expenses, but at the same time, we want our money to go mostly toward the cause.
Where is your money really going when you give to charity?
Before sending money to your favorite charity, there are three resources you can use to ensure that your money is being used the way you want it to be.
On the I.R.S. website, you can see if your organization is listed as a 501(c)3. Make sure the charity is an actual charity.
In order to receive a tax deduction for your donation, the charity must be a qualified organization. The I.R.S. has a searchable database of charities where you can verify that your organization holds this status.
Charity Navigator and Guidestar.org
One thing you’ll want to know is, after costs, what percentage of donations go directly to the cause? Some charities are lean when it comes to overhead — the American Red Cross, for example, uses less than 10% of its budget for administrative and fundraising expenses, therefore spending over 90% of its income on programs that benefit communities, according to Charity Navigator.
When choosing a charity, look for one that dedicates less than 30% of its total costs to administration and fundraising expenses. That way, you can be sure your charity has an eye on maximizing your gift. Here are a couple of resources:
The Better Business Bureau
If complaints were stacked up against your charity, wouldn’t you want to know? In today’s world, you can read product reviews on retailer websites, TripAdvisor reviews for hotels and tourist attractions, and even ratings of your Lyft or Uber driver.
You can review complaints about charities at the Give.org, the BBB Wise Giving Alliance. Be sure to read carefully — just as you’d take any product review with a grain of salt, understand that some people have gripes that might seem unreasonable to others.
The holidays are a time where we think of others, and there certainly is a lot of need out there.
Before you take out your checkbook, do a little research to make sure your money is being put to good use.
This article also appeared on my contributor site on Forbes.com as 3 Websites To Check To Be Informed Before Giving To Charity
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