Believe it or not, the end of the year is upon us. Even though it always sneaks up on me, I never cease to be amazed by how the year flies!
This time of year gets many of us thinking about charitable giving. The holiday season inspires us to give, and the New Year gets us thinking about taxes. In future posts we will discuss some of the considerations of charitable giving and gifting, and how they may effect your estate planning.
Today, let’s think about deciding where to invest our charitable contribution when donating. The last few years, a light has been shone on charities and how they use their resources. Unfortunately, some charities have been shown to misuse funds, in some cases fraudulently, and in some cases simply inefficiently.
With the economy barely out of recession, there are not as many resources to go around and many charities, good and bad, have found themselves struggling to make ends meet. So what is a well-meaning donor to do? We want to get the most bang out of our charitable buck, and avoid the disappointing possibility of learning we have donated to a poorly managed or downright fraudulent cause.
Here are some tips from the top charity watch dogs, Charity Navigator, Guide Star, and Charity Watch.
1. Give Proactively
Instead of giving simply because a charity asked, take the time to think about what causes are important to your family or community and from those, which charities have targeted goals that match your own goals for that cause. Another part of this tip, is to think twice about giving on the spot to a charity you are not familiar with.
2. Look at their Records
Once you have chosen a charity and goal you want to support, get copies of their financial records. Forms 990 for the past few years will show you how the charity spends its money, and whether they are growing their funds at least at the rate of inflation as well as raising new funds. This will help you identify a charity that is sustainable and that is willing to be transparent with you.
3. Don’t Give on the Phone
This kind of telemarketing fundraising is expensive for charities. If you get a call and you like the pitch, then hang up, do your research, and give directly to the charity. When you do this, your full donation goes to the charity and not to the fundraiser.
4. Always keep a record of your donation
For a donation under $250 the IRS will accept a cancelled check or bank record, but for donations over $250, they will require a receipt from the charity.
5. Give more than just your treasure
Charities may well benefit from your time or your talent as much as from your money. This can not only help you maximize what you give, you may be able to combine your financial contribution to your contribution of time to give much more than you thought you could. Being involved is also a great way to ensure your donations are being maximized. Give Generously.
As we get ready to be thankful for what we have and to think about the end of this year and the beginning and the next, remember to give generously and intelligently. Consider discussing you charitable plans with your estate planning attorney, who can help you put a plan together to ensure your values are also part of your planning.
