How to ensure your charitable donations make a difference

Money, News

Looking to donate to charity in 2017? You’re not alone. Americans gave a whopping $373 billion to charity in 2015. And while millennials so far have a mixed record in this category—they donate and volunteer with less frequency than any other age group—they’ve also redefined the terms of charitable giving through such innovations as crowdfunding.

Sadly, some charitable efforts fall short of actually helping those in need. Here’s how to make sure your efforts (and dollars) are not spent in vain.

Get involved

“Ideally, a donor will spend time getting to know a charity before investing with a cash donation,” says Allison Durazzi, who’s spent most of her career in the nonprofit sector and teaches communications and social media to nonprofits. “Get on their mailing list, read their website, talk to other supporters, and listen to the clients they serve.”

Do your research

GuideStar, an online database that tracks information about charities, is a good resource for getting financial information. “You can look up tax filings, board members, and sometimes even annual budgets,” says Durazzi. She also advises that you check to make sure the charity is a 501(c)(3) organization, which means that your donations are tax deductible (within certain IRS guidelines).

Community foundations are another good source of information and some even accredit charities, which means charities have been reviewed according the foundation’s guidelines.

Durazzi encourages donors to verify with your secretary of state’s office that the charity is licensed to conduct fundraising activities. Review the charity’s budgets, foundation and government grants, how well it pays its top employees, and potential conflicts of interest with board members.

Don’t judge too quickly

Today, many smaller and start-up nonprofits are fiscally sponsored under the aegis of a larger, “umbrella” nonprofit that help them reduce administrative costs and time. But judging how “good” an organization is by overhead alone is an outdated and ineffective measure. Keep in mind that nonprofits are competing with for-profit organizations for talent so that they can provide the greatest possible impact.

“Ultimately,” says Durazzi, “it comes to knowing the organization and your support of their mission and goals. Protect your investment by looking up publicly available information and gauging your experience as a supporter.”