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With the holiday season about to be in full swing, the giving spirit is likely to follow.
If you’re among those who plan to make charitable donations before the end of the year, it’s worth making sure you know exactly where your money is going and how it will be spent.
Charitable giving tends to pick up in November and December, with some donors motivated by so-called Giving Tuesday (Nov. 29 this year) or fundraising campaigns and others making sure they get their donations in by Dec. 31 to take advantage of a tax break for taxpayers who itemize their deductions.
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Most adults — 68% — say they plan to donate the same amount to charities that they did last year, according to a recent study from Edward Jones. More adults (17%) plan to increase their donations than decrease them (10%).
Last year, individuals donated a collective $326.87 billion to various nonprofits, accounting for 67% of all charitable giving, according to GivingUSA’s 2022 report.
Here are some tips for making sure your philanthropic money ends up where you want it to.
1. Avoid high-pressure tactics
Sometimes, charities will market matching gift campaigns that involve a deadline that’s fast approaching.
“It encourages to you to give without giving you time to research whether the charity will use your donation efficiently or not,” said Laurie Styron, executive director of CharityWatch.
“It’s much better to step back and think about the causes you care about … and target those charities, Styron said.
“If it’s high pressure, it’s usually not a good charity,” she said.
2. Vet the charity
You can consult websites such as CharityWatch, GuideStar and CharityNavigator, which all analyze and rate charities to varying degrees. The Better Business Bureau also offers insights through its Wise Giving Alliance.
Additionally, most nonprofits — excluding churches — are required to file a Form 990 yearly with the IRS. Donors can use a search tool on the IRS website to confirm an organization is tax-exempt and eligible to receive tax-deductible contributions.
You can also look at the nonprofit’s website for an annual report, which would also include useful information about how it spends donated money.
3. Give directly to the nonprofit
Sometimes, individuals are solicited by someone who says they are raising money on behalf of a charity, but are collecting the money themselves.
In those cases, you’d need to know whether the person definitely is going to pass on the money raised to the charity.
“Even if it’s a legitimate middle person or donation processor, they might be taking significant administrative or processing fees out of your donation,” Styron said.
Instead, she said, if that charity’s programs appeal to you, make the donation directly to the charity.
4. Beware of ‘scammy charities’
Sometimes, a person or group will take the name of a highly popular charity name and slightly change it, Styron said.
“A lot of times, scammy charities will leverage a familiar-sounding name to try to scam you out of your money,” she said. For instance, they might add “foundation” at the end of a charity’s name or “American” in front of the name to make it sound like a charity that is broadly trusted.
In other words, it’s yet another reason to make sure you look into a charity before you give.
