A Quick Guide to Charitable Contributions
The holidays are upon us, so if you haven’t already started, get your wallets ready – it’s gift-giving season! Now more than ever, gifts of a dual purpose are being given: a donation to a non-profit organization (NPO) on behalf of another is a creative and meaningful way to give to someone you care about. Adopt a snow leopard, give a goat to a family in need – so many options, so many passions. But how does one know which organization to select?
There are a few rules of thumb when it comes to investigating non-profits:
Take your time in picking the organization.
Selecting an NPO is something that should be done with care, over time. If you truly connect with the cause and the organization, then your first donation should be the beginning of a long-term relationship. You will look forward to receiving updates from the NPO on its status and accomplishments, and will hopefully continue to donate over the years and contribute to its growth. Donating simply for the cute stuffed animal or the desk calendar you receive is for the wrong reason.
The IRS is your friend (well, for purposes of this article).
You can request 990s or tax-exempt applications from the IRS, as well as confirm a charity’s 501(c)(3) status. Obviously, if you can’t locate the organization on irs.gov or The Foundation Center’s 990 Finder (foundationcenter.org), don’t donate.
Focus on the more established NPO’s.
Charity Navigator (also a non-profit organization) has been recognized as one of the more trusted resources available for NPO investigation, and provides several handy lists, such as “10 Most Followed,” “10 Most Celebrity-Related,” “10 Top Notch Charities” and “10 Charities in Deep Financial Trouble,” to name a few. Guidestar Premium is also a reputable resource for investigating non-profits. Resources such as these provide important information on NPO accountability and transparency, executive compensation and filing status – meaning, they’ve done the research for you. Check to make sure their information is up-to-date, and don’t be afraid to pick up the phone and call with questions.
Pay attention when being solicited.
Avoid making donations (like, really, just hang up the phone) over telecommunications phone calls. Scammers are much more successful over the phone. Listen and read closely: NPO’s will oftentimes select similar names for their organizations and may appear associated with other, completely unrelated non-profits. So stay alert: if you’ve been solicited, don’t do the “knee-jerk” donation. Carefully investigate and follow these steps.
Don’t forget to report it!
As we’re all aware, charitable contributions are tax-deductible, so keep track of what you give and make sure to itemize your deductions. Keep all receipts of monies expended on NPO’s, including the tickets to those annual galas you attend. For more information on allowances and reporting information, speak with a CPA or tax attorney.
So there you have it. While it may seem like an arduous process on the frontend, the goal is to establish a long-term relationship with a non-profit which suits your personal passions and desire to make a difference in the community – any community – worldwide. So choose wisely, and you never know what could blossom. A visit to a village you helped build? Now that’s a fulfilling relationship that gives a memorable gift to everyone…