Giving to Charities: What You Need to Know

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This article may upset any charities that are not running well, but after reading an article called The 20 Worst Charities in America I felt compelled to discuss the issue.

I want to start my saying I am a big believer in giving.  I am thankful that my parents taught me how to give by first giving me money to give at church.  They would give me a quarter and tell me to put it in the offering plate.  Sure, it wasn’t my money, but it made me feel like a giver and gave me a great example from young age that giving was the in fact the right thing to do.

Whether you give to your church, a local school or a national charity, you want to know that the money that you give is going to good use.  I know I do. With that in mind, here are some things to be aware of with regard to charities and giving.

Your Donation Might Not Be Tax Deductible

Many people give for the purpose of getting a tax return. There is nothing wrong with that because it still serves a great purpose in the end. What you want to make sure of is that the charity is actually a tax exempt non profit organization recognized by the IRS (usually designated as a 501C3).  Most of them will say so on their website because they know that many people will want to have the extra added tax benefit. Just know that not every organization that asks for money has the qualification. If the charity is a bonafide non profit organization, much of their financial information is often public and they usually publish an annual report.

Non Profit Does Not Mean Small Revenues

Often people get confused by the term “non profit” and think that it means a bunch of people who just volunteer all because they have big hearts and lots of free time. On the contrary, some charities offer huge compensation packages to their executives (as in 7 figures compensation packages) as highlighted in this report by Charity Watch.

This may not sit well with some people, so it’s good to know what percentage of an organizations income (donations) goes to pay salaries.

The Charity Watchdogs

I am often leery of watchdog groups because they can be biased, but there are a few organizations that have made it their mission to oversee how non profits operate. Here are a few of them:

My goal was not to put fear or skepticism in the minds of the readers, nor was it to bring discredit to any specific organization.  In this day and age we all simply need to be educated consumers and know where our hard earned money is going.

Let me know your thoughts by commenting below.


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