Helpful tips for safe and smart charitable giving
Donating to charity can be an important and empowering part of your yearly financial goals. Follow these helpful tips to make fiscally-smart and safe decisions so you can feel at ease about your generous donation.
Donating to charity is an important and rewarding achievement when attaining your financial goals. Besides the great feeling you get from giving to others, it’s also an empowering way to invest in the success of an organization that’s doing work you support. If you’re thinking about making a financial contribution to a charity or non-profit organization, here are a few things to keep in mind to ensure you’re making a safe and smart decision.
How to select a charity
Find a cause that resonates with you personally and echoes what you value. Once you find organizations you’re interested in supporting, you can start your research by reading the mission statements on their web sites to see how they align.
When you’re ready to dive deeper, read their annual report. Can you see where your dollars fit and how they may be helpful to the end goal? Information on the charity’s finances from total income, expenses, and their ending net assets can serve as a great resource to better understanding their fiscal needs and provided services.
Don’t be afraid to call and ask questions. Most of the organizations you are researching will have a Donor Outreach Coordinator on staff. Ask them about their accomplishments in the last year, or even more precisely: where exactly your donation is going or an example of how it would potentially serve others.
Use the Better Business Bureau’s Wise Giving Alliance to look through factors like governance, finances, informational materials and charity effectiveness to fact check what you’ve learned from the charity.
How much giving fits your budget
What amount of charitable giving is right for your budget? Since it can be tempting to give based on emotional pulls and in-the-moment opportunities during the holiday season, having money budgeted for giving maximizes your ability to give without chipping into your own savings. We recommend saving for it year-round to avoid piling up on expenses during this fiscally-demanding time of year.
Choose a portion of your income, on top your normal savings, that you feel comfortable with putting away each month for donations. Start small (1-2% of your monthly income is a great place to start), Once it becomes a habit, you can start setting aside even more each month.
To make the most of what you set aside, wait for times of the year that organizations or your own company offer to match donations.
How to donate safely
Once you’re ready to donate, make sure you’re doing it with cybersecurity and safety in mind. Even though you’ve already done a lot of research, use the IRS has a Tax Exempt Organization Search to double check the legitimacy of an organization and its tax-exempt status before donating.
Check the contact information on their web site for a phone number and physical address. This ensures the company is based in the United States, an important factor should you have to take legal action.
Remember to follow cybersecurity best practices for donating online. Never give out your payment information via email to any charity “representative,” and always make sure the website has a secure payment portal to process your payment method, just as you would while online shopping.
Ready to start saving for charitable giving? Here are three easy saving tips.