Tricia sends in an interesting article with advice on charitable giving. Since that will be the “business” of most currency holders after the Reval, we post the discussion. Perhaps file this one away.
The Ultimate Guide to Supporting Charities on a Budget
Patrick Placzkowski, CouponChief, n.d.
(https://www.couponchief.com/guides/support_charities_on_a_budget)
In it’s 2019 report on philanthropy, Giving USA, likely the top authority on charitable giving in the nation, announced a number of important findings. Two of the most interesting were:
- Charitable giving in the US reached a record high in 2018, with Americans donating an estimated $428 billion, topping the $400 billion mark for the 2nd year in a row.
- Nearly 70% of that total was donated by individual donors, as opposed to corporations, charitable foundations and bequests.
Notwithstanding this incredible generosity of individual Americans, a study by the Chronicle of Philanthropy found that the share of Americans giving to charities is actually on the decline. How is that possible? Some experts point to the growing affluence gap, meaning that as more wealth is concentrated in fewer people, those individuals on the losing end of the deal are finding it harder and harder to spare some of their hard-earned funds for charitable causes. Now, this doesn’t mean Americans are in less of a giving mood, just that more of them are not quite sure how to go about doing it. Sound familiar?
That’s where this guide comes in. Below you’ll find a wealth of information and advice for giving to those deserving causes that you care so deeply about without breaking your tight budget. You’ll learn how to determine just how much you can afford to give, as well as where your donations will do the most good. More importantly, you’ll find plenty of tips for effective giving regardless of the amount of cash you have available – or even if you don’t have any cash to donate at all. Finally, we speak with Patrick Placzkowski, CEO of the Boys & Girls Clubs of Grand Rapids, who offers his take on the importance of giving – of both time and money – to worthy charitable causes.
Before You Give
Whether you are rich or not-so-rich, and whether you’re in charge of a major charitable fund or just an average citizen looking to do a little good for the community, it’s important to know that what you’re giving away is actually going to help others in need. So, before making any contribution, consider your answers to the following questions:
How much can I afford to give?
Tight budgets mean tough choices, and how much any individual can afford to give to charitable causes is a purely personal decision, as it should be. However, there are statistics on how much people are giving, or at least how much people are taking in charitable deductions on their federal income taxes:
|
Adjusted Gross Income |
Charitable Contribution Deduction (average) |
|---|---|
| Under $15,000 | $1,471 |
| $15,000 to under $30,000 | $2,525 |
| $30,000 to under $50,000 | $2,871 |
| $50,000 to under $100,000 | $3,296 |
| $100,000 to under $200,000 | $4,245 |
| $200,000 to under $250,000 | $5,470 |
| $250,000 and above | $21,361 |
Again, it’s important to keep in mind that the above figures are averages regarding how much people are giving to charity, and do not reflect the unique financial and life circumstances of any particular person in any given year. In other words, how much others are giving and how much you should be giving are entirely different matters.
It’s also important to remember that donating to a charity doesn’t have to mean donating money. Put another way, your value to worthy charities is not is not limited to your net worth. More on that below.
How do I know if the charity I’m considering is legitimate and worthy of my contribution?
Unfortunately, too many people end up donating to fraudsters who are only out to line their own pockets. The sad truth is that there are more than a few illegitimate “charities” operating out there, and it’s often extremely hard to separate out the honest ones from the phonies. To avoid this problem you’re going to have to do a little research. Fortunately, there are a number websites where you can check on the trustworthiness of charitable organizations:
- BBB Wise Giving Alliance:
Sponsored by the Better Business Bureau, The BBB Wise Giving Alliance produces reports on approximately 1,300 nationally- soliciting charities, evaluating each against 20 accountability standards (such as solicitations, finances, oversight, etc.) Donors can access reports via the website’s search engine or by browsing its charity list. Additionally, reviews of more than 10,000 regionally-soliciting charities can be accessed by visiting the appropriate local BBB website. - Charity Navigator:
Charity Navigator examines tens of thousands of financial documents to assess the worthiness of more than 9,000 U.S. charities, both large and small. Visitors to the Charity Navigator site simply enter the name of the charity they wish to check out to receive a numbers-based rating that considers the charity’s financial health, accountability and transparency. - Charity Watch:
Charity Watch provides letter-grade ratings for charitable organizations based on a range of criteria including audited financial statements, annual reports, tax statements, and more. Ratings assess effectiveness and legitimacy. Site visitors can also find out about any reported instances of charity abuse. Donors can search charities by name or browse top-rated organizations by category. - GuideStar:
GuideStar provides information on over 1.8 million IRS-recognized tax-exempt organizations (nonprofits, community foundations, etc.) as well as thousands of faith-based nonprofits that do not require IRS registration. Basic information can be accessed instantly via the website’s search engine. Users can filter their searches by type of organization and geographic location. More detailed data is available, but requires (free-of-charge) registration.
Additionally, most states require charities or their fundraisers to register with the state before soliciting donations within their borders. You can find out if a charity has registered by contacting your state’s charity regulator.
Besides checking one or more of the above-listed resources, it’s a good idea to press a little further for more information on the charities you’re considering. Here are a few tips:
- Google the name of the charity along with words like “rating,” “review,” “scam,” “fraud,” or “complaint.”
- If making a money contribution, ask, “How do they want me to pay?” Legitimate charities take checks and credit cards, but will never ask for gift cards, wire transfers or cash. If someone is asking for one of these last three, they’re probably scammers.
- Get the specifics on how your donation will be used. Legit charities can tell you, scammers won’t.
- Scammers like to rush you into making a decision, so if you feel pressured, back away.
- If someone tells you that you are guaranteed to win a sweepstakes if you make a donation, you’re being scammed. Claiming such a win is not only a con, it’s illegal.
- Always independently confirm a charity’s tax-exempt status. Never take their word for it.
- Finally, trust your gut. If something doesn’t seem quite right, back away, at least until you can confirm an organization’s legitimacy.
Does the charity represent a cause that I support?
Most people’s charitable giving action plan consists of contributing to the first charity that asks for a donation. There are, however, literally thousands of worthy charitable causes out there, each with its own unique area of interest, specific goals, mission, and effectiveness. That means you have a lot of choice in the types of causes to donate your time or money to. Maybe it’s time to become more proactive. But, how do you know which charities to choose?
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Start with your own mission statement:
All charitable organizations have their own mission statement that defines their cause and provides a general description of how they intend to address it. You can do the same thing. Consider the issues that matter the most to you personally, the ones that you feel the most passionate about. Think about how you would like to see those issues addressed. Then write it all down on a piece of paper. That’s your personal charitable mission statement. You can almost guarantee that there are one or more charities out there with mission statements that align with your own.
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Find the charities that match your interests:
The internet can help. Sites like Charity Navigator and GuideStar (linked above) allow for searches by type of cause and location. Other similar online resources include GreatNonprofits and Philanthropedia. Once you’ve identified several potential organizations, contact each and set up a brief interview. Then ask the charity’s representative these two questions:
- What has your organization done to move effectively toward meeting its goals?
- What can I do to help?
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Think small and local:
There are a lot of great charities with national and international footprints, all with names you’d recognize. These big charities garner the lion’s share of donations, often from major philanthropic sources providing huge sums of money. There are also tons of smaller, local charities, however, that focus on community-level issues and concerns. Local charities are lesser known and often overlooked by donors like you. And it’s these smaller, local charities where individuals looking to donate their time and talents are most likely to find a home.
A great online resource for finding worthy smaller, local charitable organizations is America’s Best Local Charities (ABLC). ABLC is a federation of over 700 member-organizations that work on behalf of children, the elderly, the ill and disabled, animals, and many other worthy causes. The site’s search engine allows donors to locate charities in their local areas by charity name, category or keyword.
Think you’ve been the victim of a charity scam? Here’s how to fight back.
The number of fraudsters masquerading as representatives of worthy charities is staggering, and the reason that so many of them are in operation is that, unfortunately, they’re getting away with it. That needs to stop, and it’s the average American citizen that’s in the position to do it. If you’ve been bilked of your hard-earned cash by a charity scam or think you’ve been approached by a scammer, this is what you can do:
- Contact the IRS:
The IRS is in charge of the regulation of nonprofits on the federal level, so that’s where you want to go to report bad behavior by a charity. You can fill out Form 13909 and submit it by mail to: IRS EO Classification, Mail Code 4910DAL, 1100 Commerce Street Dallas, TX 75242-1198. You can also fax your form to (214) 413-5415, or email it to [email protected]. - Contact the FTC:
The Federal Trade Commission would also like to hear about any charity scam you run into. Go online and use the FTC Complaint Assistant, or call them at 877-382-4357. - Contact a state authority:
The IRS suggests that you copy any complaint you file with them to your state’s tax agency and/or charity regulator. - Call the cops:
Finally, if you’ve been approached in-person by someone soliciting a charitable contribution whose legitimacy you question, pick up the phone and inform your local law enforcement agency. They’ll definitely want to know if a scam’s being run in their jurisdiction.
Money Donations on a Budget
The simplest method of giving to charity is to write a check. Simple doesn’t always mean easy, however, and if you are reading this, writing a big check is probably out of the question. That’s alright. The important thing to remember – and virtually every charity will tell you this – is that no donation is too small. In addition, there are a few strategies you can use to make giving easier and increase the impact of your money donation, regardless of its size:
Matching Donation Programs
Lots of employers today have established matching donation programs in which they will match an employee’s charitable gift with an equal gift of their own, thus doubling the effectiveness of the employee’s donation. So, be sure to check with your employer to see if your company has a matching donation program.
Tax Refunds
It’s a bit of a mind trick, but sometimes people think of their tax refund as a gift or found money, which might make it easier to simply turn around and donate that refund to the charity of your choice. Interestingly, such a contribution will likely be deductable on your next year’s tax return.
Set Up Automatic Donations
One way to make giving on a budget easier is to include donations as a part of your monthly budget. And setting up an automatic donation – from your checking or savings account, or a debit or credit card – can make giving practically painless. Automatic donations are also great for charities because they can better manage their own budgets when they’re sure your donation will be coming in.
Giving to Charities without Giving Money
It’s no secret that most charitable organizations need money donations to survive, and writing a check to your favorite charity is always greatly appreciated. But direct cash donations are only one of the means by which charities bring in the funds needed to pay the rent, keep the lights on, and carry out their good works. There are literally dozens of other ways charities benefit from the generosity of the public, and they all depend on small, individual donors like you. Here are a few popular options for giving to great causes that don’t require opening your pocketbook. Some are obvious, while others you’ve likely never thought of before. But all will make a real, positive difference in your community.