How to Be Smart with Your Donations

Man holding out a stack of twenty bills while standing on the sidewalk, used for Christian Tedrow blog on how to make smart choices with your donations

Every year it is estimated that roughly over $300 billion dollars are donated to various charities by citizens looking to make a difference within the United States. We are driven by a need to help others and it doesn’t take much to be convinced that a charity or cause needs our help. There are thousands of organizations to choose from when donating, but unfortunately, not all of them are legitimate. In today’s society, scams are harder than ever to see through, making it necessary to thoroughly research institutions before giving them money that could be better used elsewhere.

Legitimacy of a charity

Discovering a charity is nothing more than a convincingly disguised sham can sour contributors from making donations in the future. Sadly, the good-will of concerned citizens can lead to a fat payday for con artists and then ruin it for other, legitimate philanthropies.

Organizations should always be researched before making a donation. One thing to look for is their tax-exemption status. False charities will never be registered, so it’s a definite red flag if you can’t find a charity listed. Another way to discover if a philanthropy is real is to check it through the website. This is a reliable site run by the Better Business Bureau.

Administrative expenses

The Better Business Bureau states that a charity organization should be spending, at the very least, 65 percent of its donated profits on activities related to its cause. If you’d prefer a higher amount of money that goes to supporting the cause instead of administrative overhead, investigate other charities. If you can’t find information on how a charity’s money is allocated, consider finding another, more transparent, organization. There are many philanthropies in existence that put a higher percentage of donated funds towards their mission and are open about how their money is used.

Donating efficiently

What many people don’t realize is that donating to multiple organizations is a far less efficient use of their money than donating to just a select few. Most contributors do not realize that charities have handling and processing costs. This could potentially lead to only a small portion of donated funds making it to the organization’s cause.

Contributions should always be made in person. Never give money or personal information to a phone solicitor. Con artists assume names that are very similar to an existing organization in order to trick potential donors or tell sad stories designed to evoke sympathy.

Alternate forms of donation

Donations do not always have to be made in the form of money. Giving food and material goods can be just as good as writing a check. Volunteering personal time to an organization (like a soup kitchen) is a guaranteed way to make a difference as well. Do not think simply because you lack money means you can’t make a difference and support a cause; there are lots of benefits to simply being involved.