6 Tips to Donate to Charity the Smart Way

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We are fast approaching the winter holidays and that means Salvation Army buckets will be making appearances outside stores across the U.S. But it’s not just the Salvation Army that ramps up its fundraising during the happiest season of all. A 2011 report from The Chronicle of Philanthropy found that nearly 70 percent of Americans believe it is important to give to charities during the holidays.

For many of us, donating to the less fortunate is just as much a part of the season’s celebration as tinsel and carols. However, don’t let your warm and fuzzy feelings lead you to make bad decisions when it comes to donating to charities.

Watch the video below for some tips from Money Talks News founder Stacy Johnson regarding how to make smart charitable donations. Then keep reading to learn more about what to check before you write a check.

1. Pick your passion

Of course, before you can donate to a charity, you need to find one. Start by considering what fires you up. What would you change about the world? Which injustice would you right if given the chance?

From curing childhood cancer to saving the oceans, there are charities for virtually every cause. Once you settle on your general area of focus, decide whether you want to donate locally, nationally or internationally. If you are concerned about hunger, you could donate to the local food bank or perhaps you’ll feel called to help those in developing countries. It’s your call. There is no right answer.

2. Make sure your charity is legit

After you know your cause, it’s time to find a charity worth your money. You could do a Google search, but you are better off going to a dedicated site like Charity Navigator or GuideStar.

According to Giving USA Foundation, Americans donated more than $316 billion to charitable causes in 2012. With so much money at stake, charity scams can be big business for rip-off artists who prey on others’ good intentions. Some so-called charities aren’t even registered tax-exempt organizations and are simply a front to siphon money into the owner’s pocket.

Avoid being duped by charity scams by double-checking any charity’s credentials through Charity Navigator, GuideStar or Give.org, which is run by the Better Business Bureau.

3. Watch out for excessive administrative expenses

Next, even if your charity is legitimate, that doesn’t mean your money will be used wisely. Before you donate to Kids Wish Network – dubbed America’s worst charity by one report – you probably should know it spends less than 3 percent of its money on actually granting kids’ wishes.

According to the BBB Wise Giving Alliance standards, a charitable organization should spend at least 65 percent of its money on program expenses – that is, activities directly related to its cause. While 65 percent may be the bare minimum, you can find many charities that go above and beyond. For example, consider Feeding America, which spends a whopping 97.9 percent of its budget on program expenses.

4. Make your money work harder

Once you’ve made a couple donations, your mailbox is likely to begin filling with solicitations. It may be tempting to spread the wealth and give a little here and a little there, but your money will go further if you concentrate your donations on one charity, advises Charity Navigator on its website.

Remember, each organization has handling and processing costs associated with receiving your donation. There may not be much left of your small donation after those costs are worked into the equation.

5. Donate directly

Never make a donation to a telephone solicitor.

First, they may not even be legitimate. Telephone charity scams use names similar to well-known organizations or they may say they are raising money for causes that tug at the heart strings such as supporting military families, veterans or police officers. In reality, your money will be used to profit the person calling and do nothing more.

Second, even if it is a legitimate charity, by donating over the phone, there is a very good chance only a small portion of your money will actually make it to the organization in question. A report from Michigan Attorney General Bill Schuette found that, on average, only 35 percent of the gross proceeds raised by third-party fundraisers in that state actually went to charities.

6. Give more than money

Finally, don’t forget that your favorite charity can likely use more than just your money. Soup kitchens need hands to serve food; environmental groups need feet to survey land. If you have a particular skill such as Web design or marketing, you may be able to donate those services too.

Volunteering is a win-win. It means less money a charity must spend on hired help, and it gives you a chance to walk the walk and actually make a difference. And that is a warm, fuzzy feeling no check can ever match.

What is your favorite charity? Tell us in the comments or on our Facebook page who you support and why they get your money.

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Comments & discussion

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  • D Dee

    Your big name charities are no longer real charities helping those in poor circumstances. Many large non-profits are now calling themselves Philantrophic missions………they fund raise for your dollars and then decide who gets those donor funds. They also compete for government grant dollars (which are your tax dollars) to fund their organizations. Is that how you want your donation spent? Because they keep a large % of admin fees for that work. Ronald Mc…Donald House and United …Way are moving into philantrophy and away from charity. Remember how those funds collected for the connecticut shooting were diverted to another area because that United ….Way got the funding and then used it for another reason? Unless you do your homework you will find out later that your donation is used in ways you never intended. I have to ask because the continued complaint is that we need more money for education and healthcare? I think we pay a premium for our schools and our hospitals, doctors, and staff. Billions go for research and yet we get no closer to the goal. How much does it cost for a decent education and decent healthcare? I think we pay too much already? Are school administrators and doctors worth the hundreds of thousands we pay for them? Is it worth it when we see continued declining high school graduation rates and then enormous costs for a college education and loan costs? Or are we just keeping the doctors, schools and non-profits employed? Take a look and make your own decision?

  • Mary Harrsch

    I like to begin my charitable giving in my own community first. Like many other smaller communities across America, our community has been hit hard by the recession and our county still suffers from an unemployment rate of over 12%. So, first I give to our local food bank, “Food for Lane County”. Many people have become so desperate they have had to surrender their pets, too, so next on my list is “Greenhill Humane Society”. Then, because I believe cultural experiences really enrich people’s lives, I donate to the John G. Shedd Institute for the Arts, founded by friends John and Ginevra Ralph. They work hard all year to bring concerts and musicals to our area and offer both instrument and voice instruction to all ages. Many of our local theater students from the University of Oregon have appeared in their wonderful productions as well as community youngsters and “oldsters” alike who have had their inner thespian awakened by acting in Shedd productions.

    Then, like Stacy recommends, I evaluated my skill sets that include writing, photography and web design and selected several community outreach services that could use someone with my experience such as a Youth Digital Photography Workshop that the Emerald Photographic Society is offering free to local high school students, a project to provide photography services to the university’s Environmental Studies program for educational materials they are publishing and an opportunity to help develop a website for one of the Boy Scouts’ local summer camps.

    Nationally, I support the Colonial Williamsburg Foundation, the Mount Vernon Society, the Civil War Preservation Trust and the site preservation program of the American Institute of Archaeology. My admiration for the many humanitarian activities of former President Jimmy Carter motivates me to support his Carter Center. All of these charities have high ratings on Charity Navigator and I believe studying the past provides valuable lessons for problems we may face in the future. I also provide pro bono web design services to the Historical Figures Foundation in Ventura, California that promotes the historical sculpture of American artist George S. Stuart and his historical monologue presentataions and I serve on their board of directors.

    On a global scale, I travel around photographing historical art and architecture and make my images freely available to teachers and students worldwide via Creative Commons. As a Wikipedia editor (apparently one of the few older female editors), I provide images for illustration to Wikimedia Commons and created the main page for the Vietnam Combat Artists Program at the request of several of its participants. I think all of these organizations enrich our world and are worthy of support.

  • BobintheHeights

    I give to the ASPCA because they go to places where there have been catastrophes such as floods, earthquakes, tornados, etc., and help save animals that are left behind by their families and would most likely die slow, painful deaths if it were not for these wonderful people.