In addition to being good for the soul as well as the community, charitable giving is an essential part of good money management. Donating to charity even offers potential tax benefits. Donations to qualified organizations may entitle you to a charitable contribution deduction against your income tax if you itemize deductions. If the donation is deductible, the cost of the donation is reduced by your tax savings.
If you’re going to make a long-term commitment to an organization, you’ll want to know everything about where your hard-earned savings are going. To help you find the right cause and get the most for your money, follow these helpful tips:
Do Your Due Diligence
Start with a broad search using websites like Charity Navigator, GreatNonprofits.org and GiveWell.org, for example, and do some research. Consider going local. When you give locally, you can more readily see the effect your donation has in your community.
Narrow down your choices to your top two or three and conduct in-person interviews with each if you can. Does their strategy seem clear? Can you see any evidence of the impact of their work? What progress have they made toward their goals and what metrics are they using to measure it?
How will your money be spent? Administrative costs and other costs sometimes eat up the donations. Aim for an organization where at least 70% of your money goes directly to helping others.
Set Up Regular Charity Contributions
Instead of giving unpredictably, commit to regular contributions, like monthly donations, or even set up a charitable trust to operate in a way that provides regular income for the charity.
Want to ensure your donations are being used wisely? Donate your time as well as your money and get personally involved! You can volunteer at charitable events, join a charity’s board or lend your unique skill set.
By following these guidelines, you’ll get the most from your charitable donation and feel good about giving to a worthy cause.