Charities: 4 Things to Know Before Donating

Charitable Giving? Admirable. Getting ripped off? Inexcusable.

Suppose you found out that the hard-earned money you give to a charity isn’t helping anyone who needs it, but going directly into the pocket of a scam artist. Sound far-fetched? Far from it. We’ve done several stories over the years about non-profits who were exactly that: scams.

One example: a guy who had plastic collection boxes all over town on various store counters. The boxes had the name of a real charity on them; one that helped victims of 9-11. But it turned out the guy was nothing more than a simple thief who copied the charity’s logo, bought some boxes, solicited some store owners, then periodically emptied the boxes into his own pocket. How did we find out? It wasn’t rocket science: we called the charity from a cell phone while standing in front of the collection box at a dry-cleaning counter. We asked the charity to send us their financial information. When we mentioned that we were calling the number we found on their collection box, they were a bit surprised because they didn’t use collection boxes.

Our next call was to the cops (who, btw, told us they didn’t have the manpower to stake out the store and wait for the guy to show up. Their only advice was to notify the shopkeeper). The shopkeeper told us that the box had been sitting there for months and been emptied several times.

In all that time, why hadn’t someone else done what we did: make a 30-second phone call?

There’s a special place in hell for people who steal or otherwise enrich themselves by exploiting people in need. But until they reach their final reward, don’t make their lives easier. Take the small amount of time required to insure that the charity you’re giving to is legitimate and that the money you’re donating is actually going to reach the people or causes you’re trying to help.

Here are some general tips to charitable giving, but you could always search Google for dozens more online.

Make sure the charity is real

As you learned from reading the above, the best way to give to a charity is by mail or at a physical location that you can verify.

Read some mission statements

Even if a charity is real, is it one you want to contribute to? Find out by starting with their mission statement. A mission statement is, quite simply, a statement of the charity’s mission (complicated, right?). Any reputable charity should have one (or something like it), and they’re as easy to find as a quick Google search for the charity’s name followed by the phrase “mission statement”. Here’s the one I found for Goodwill…

Goodwill Industries International enhances the dignity and quality of life of individuals, families and communities by eliminating barriers to opportunity and helping people in need reach their fullest potential through the power of work.

If the charity’s mission statement sounds like the kind of thing you’d put your money behind, then you’ll feel better about doing just that.

Sort through some numbers

Even some perfectly legal and well-publicized charities may not deserve your money. For example, how would you feel if you donated to a charity, then found that 75 cents of every dollar you’re donating is paying for television ads? Or contributing to the CEO’s million-dollar salary? Or going to a telemarketing organization that’s harassing people at home or at work? It’s more common than you might think. So before you give, try and find out how much of the charity’s income goes to administrative costs (paper, pens, advertising, CEO’s, etc.) and how much actually gets to programs that help people. If you’re the accounting type, you can request a charity’s 990 (its federal tax return) either from the charity itself or from sites like the Better Business Bureau, GuideStar and Charity Navigator. If you’re not the accounting type, you can still read the rankings and/or grades given to charities at these sites.

Read some reviews

That’s right… charities get reviewed too. So before you give, check out some of those reviews. See if other donors are happy with their donations and how well the charity is accomplishing it’s mission. You’ll find reviews on both GuideStar and Charity Navigator, but Google is going to be your best friend here.

Bottom line?

The world is full of three types of people: those who need help, those who really want to help those people, and those who are either too lazy or too stupid to work and instead prey off the charitable nature of people like you. Don’t ever indiscriminately hand out money to someone who rings your doorbell or stands on a street corner. Ever. And take just a minute or two, do a little online reading, and get the biggest bang for your donated buck.