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MAKING CENTS OUT OF THE NEWS
Blog #43
(December 22nd, 2011)
Charitable Giving – Where Does Your Money Go?
By Tom McAllister, CFP®
My friends at Frank and Kraft, estate planning attorneys in Indianapolis, provided the inspiration and resource information for this final 2011 blog post. Next week you may expect to receive be my winter newsletter, “One Man’s Opinions.”
Just as soon as I’ve finished writing this missive, I will write my year-end checks to charity. Like most of you I’m sure, I’m deluged with mail requests from various charities during these final weeks of the year. From time to time I do add to my rather long list of entities to which I make my (mostly modest) contributions.
Frank and Kraft provide us with some helpful hints on how we can trace where our money actually goes, investigating whether or not a charity is valid, and how it uses the donations it receives.
Step One - making sure the charity is qualified: Go to
www.irs.gov
, clicking on the tab “Charities & Non-Profits,” and then on the link “Search for Charities.” Listed on that page are all charities registered to receive tax- deductible contributions.
Step Two – checking for complaints: Go to
www.bbb.org
and see if any complaints have been filed against this institution with the Better Business Bureau. (This is especially important if the charity is local and/or relatively small.)
Step Three - To determine how the charity uses our donations: Go to
www.charitynavigator.com
. Enter the name of the charity to learn more about its stated mission, annual revenue, and how it spends its resources. Check out the percentage breakdown of expenses: fundraising (the cost of raising money), the costs of running the charity, and money actually spent for charitable purposes. I am wary of giving my money to any charity that spends more than ten percent raising funds and more than ten percent on administration, as every dollar spent on those things is a dollar less for the cause. Ratings are also provided at Charity Navigator. Donors, volunteers, community partners, and recipients of the charity provide feedback and ratings. Not all charities are rated in this manner, but many are.
Finally, you should feel free to pick up the phone and give the charity a call. Ask for more information and ask any questions you wish. With many charities you can make a directed gift, specifying how you wish your donation to be used.
Donating to a charity, especially during the holiday season, is a wonderful way to help the less fortunate of our fellows. I try my best to make sure my own donations go towards making this a better world! Merry Christmas to all, and to all a Happy New Year!
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