Thinking About Giving to Charity?
Are you considering giving money to charity? Before instead of getting out your checkbook, take some time to research causes and charities that are meaningful to you.
While you may be tempted to give to the first charity that succeeds in tugging on your heartstrings, a little bit of research can ensure your charity dollars make as great an impact as possible. Consider the following tips before you give.
1. Narrow your focus.
Instead of waiting to be solicited by fundraisers or friends asking for donations, identify the causes that you care about. You might decide to do this with your spouse or family members. Next, set yourself a budget for giving. According to the Giving USA report, the average household donated just over $2,000 to charitable causes in 2015. Keep in mind that since each gift comes with fixed handling costs, smaller gifts go mostly to administrative and transaction fees.
But that doesn’t you necessarily need to limit your donations to one or two non-profits. A good rule of thumb is to focus approximately half of your giving on a single charity, and then select a few more organizations to divvy up the rest of your funds. You might choose set aside a certain percentage for gifts that will go to your own community. The remainder can be used for impulse donations, such as disaster relief funds or fundraising drives brought to your attention by friends or family.
2. Look into the charities you choose.
Think of your donation like an investment. You wouldn’t invest without finding out where your money is going, and you shouldn’t give to charity without finding out where your money is going either. Once you’ve settled on a cause that you would like to support, take some time to investigate the major players. Online, you’ll find IRS forms and financial reports for millions of non-profit organizations. You will be able to see what kind of work they’re doing as well as how much money they’ve raised and who is on their board of directors. Other websites rank charities according to their accountability, finances, and transparency with donors. Keep in mind that nonprofit organizations are required to limit their administrative and fundraising expenses to under 25% of their overall budget, making these organizations the best choice if you want to make sure your money is actually helping. If you’re still confused about where your money will go, you can always contact the charity you’re interested in for further information.
3. Commit for the long haul.
If you feel confident in the organization you’ve chosen and you’ve done your research, consider a multi-year donation. When you make a commitment to give for several years in a row, you can engage more in the charity’s processes and outcomes. You’ll be able to work on building up a relationship with the charity over time. In addition, they’ll be able to count on you. Charities rely on multi-year donors to ensure their stability in years to come.