Money Monday: 7 Steps to Take Before Making a Charitable Donation
Tips to make sure your money is used for a good cause.
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Do Your Resesarch - Donating to charities is a personal finance strategy that not only makes the donor feel good, but that generally results in a Schedule A (for Form 1040) tax deduction. According to the IRS, a charitable contribution is a donation or gift to, or for the use of, a qualified organization. These contributions are voluntary and are made without getting, or expecting to get, anything of equal value. — Bridget McCrea (Photo: GettyImages)
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Not All Charities Are Created Equal - Not all charitable organizations are created equal. To make sure your recipients actually benefit the people and/or organizations that you want to help, the Federal Trade Commission (FTC) shares these steps that you should take before writing out that check.(Photo: GettyImages)
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Get the 411 - Ask for detailed information about the charity, including name, address, and telephone number. Searching the name of the organization online — especially with the word “complaint(s)” or “scam” — is one way to learn about its reputation.(Photo: GettyImages)
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Call the Charity - Find out if the organization is aware of the solicitation and has authorized the use of its name. Also ask if the charity or fundraiser has to be registered in your state by contacting the National Association of State Charity Officials (NASCO), an association of state offices charged with oversight of charitable organizations and charitable solicitation in the U.S.(Photo: GettyImages)
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Dig a Little Deeper - As an extra precaution, check if the charity is trustworthy by contacting the Better Business Bureau’s (BBB) Wise Giving Alliance, CharityWatch or GuideStar.(Photo: Courtesy Better Business Bureau)
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Create an Annual Donation Plan - That way, you can decide which causes to support and which reputable charities should receive your donations.(Photo: GettyImages)
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“Tax Exempt” vs. “Tax Deductible” - Tax exempt means the organization doesn’t have to pay taxes. Tax deductible means you can deduct your contribution on your federal income tax return.(Photo: Tim Boyle/Getty Images)
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Don’t Use Cash When Making Donations - For security and tax purposes, it’s best to pay by check — made payable to the charity — or by credit card. Never wire money to someone claiming to be a charity. Scammers often request donations to be wired because wiring money is like sending cash: once you send it, you can’t get it back.(Photo: GettyImages)