With the holiday season underway in the United States, many Americans are looking to help the less fortunate by donating to local and national charity organizations. But experts are warning donors to be cautious with their resources this year, in order to make sure that their donations have the maximum positive impact.
Some Americans may choose a charity simply for the tax deduction their contribution will provide at the end of the year. But this kind of quick thinking and lack of research is exactly what some less reputable charities benefit from.
Dr. Ronald Pitcock teaches an honors course on the nature of giving at Texas Christian University in Fort Worth. He warns that a “bad” charity will quite literally bank on the sympathy of others. “They know many donors will almost immediately give from trusting hearts before ever checking the organization,” he says.
Pitcock and other experts say that putting a bit of time into researching an organization can help put an end to abusive, not charitable, practices and redirect donations to more responsible organizations.
Jim Hegarty, president and CEO of Nebraska’s Better Business Bureau, explains that the organization also rates charities on its affiliate site, Give.org, to help donors with that research.
Hegarty says the process is fairly straightforward in the BBB’s ratings. The BBB applies 20 standards for charity accountability in the areas of governance, finance, effectiveness, fundraising, and transparent information.
In order to qualify for a BBB accreditation, Hegarty says organizations need to meet those 20 standards. Additionally, “Sixty-five percent of all the money [they] take in needs to go to the actual services the charity is supporting,” Hegarty says, without using too much of those funds on solicitors or for fundraising efforts.
Anna Helhoski, a writer for blog NerdWallet, suggests choosing a charity that uses approximately 80% of their funding for programs, as all groups need to pay for administrative costs and fundraising efforts. Helhoski cautions donors to stay away from organizations that use vague language, like saying only that “a portion of your donation” will be used.
Whether or not the organization reports to the BBB, donors should look for transparency when researching charities. Many organizations display their tax return information online to give the public an idea of how their funds are used.
Donors should also look to give to a cause that means something to them personally. There are over 1.4 million charity organizations in the United States, according to the National Center for Charitable Statistics, so there should be something for everyone.
Many organizations are looking for monetary donations in order to help others get through the winter. Michael Smith, the president and CEO of Goodwill of Southwestern Pennsylvania, says that his organization receives more donations during the winter months than other times of the year, even though they accept donations year-round.
Those who don’t have extra cash to spare can consider other ways to donate, such as giving clothing, household goods, food, and toys for children.