The Holidays are all about giving. At Terrell • Hogan, we believe that it is important that consumers be fairly informed. The Holidays, as is true after natural disasters, is often when fake charity scams pop up. So it is important to start by checking www.scambusters.org. However, you not only want to make sure that a charity is legitimate, but you also want to make sure that 1) the charity is a high performing nonprofit, 2) your donation is used for the purpose that you thought it was for, and importantly, 3) you don’t end up a victim of identity theft.
In 2010, Hope Consulting’s report Money for Good, found that 9 out of 10 donors said that nonprofit performance is important, yet only 3 out of 10 did any research before giving, and only 3 out of 100 did any research to find a high performing nonprofit.
Consider your charitable giving as investing and do what you do or would do with your investments: identify, research, and rebalance. Here are some tips to remember:
1. IDENTIFY. Choose a cause that you are passionate about, one that is important to you. Try to be less reactive and more proactive in your giving. Focus your dollars on sustained support and define what you want to accomplish with your giving.
2. RESEARCH. Investigate nonprofits that work towards your cause. Investigate their accountability: mission, legitimacy, use of funds, and impact. Check what percentage actually goes towards your cause and not towards administrative or fundraising expenses. You can start by checking each charity’s own website. You can verify this information on several internet sites such as:
- Charity Navigator: Independent charity ratings and evaluating of more than 5,000 of the largest US nonprofits on financial health, accountability, and transparency (201) 818-1288;
- Charity Watch: Independent charity evaluating and rating service dedicated to helping donors make informed giving decisions;
- GuideStar: A 501(c)(3) public charity that collects, organizes, and presents information about nonprofit organizations;
- GiveWell: Ratings website providing in-depth research on the ‘highest impact’ nonprofits; great for donors that want to maximize impact;
- Philanthropedia: provides expert reviews on verified, financially responsible charities;
- BBB Wise Giving Alliance: seeks to assist donors in making informed donation decisions, especially related to organization legitimacy and status; and
- Great Nonprofits: Website where people review and talk about nonprofits. Compiles reviews from donors, volunteers, beneficiaries, others.
3. DONATE SAFELY. The safest way to give is by using a credit card, money order, or PayPal. The least safe way is to give by check- as it gives someone all the information they need to open an electronic account- your name, address, phone number, and your banking information. Legitimate charities give you documentation that your donation is tax-deductible.
4. GIVE ON YOUR TERMS. You may be able to specify how you wish to give, such as a monthly charge to your credit card, or how the charity spends your donation, such as used locally in your own community.
5. REBALANCE. As time passes, take the time to reevaluate your giving strategy. Is the charity meeting the intended result(s)? Look at annual reports and verify with independent sources to determine how monies were used and what impacts were achieved. Would a different charity have a greater impact on your desired cause? Has your cause changed?
6. GIVING IS NOT ONLY ABOUT MONEY. Yourself and your time is the ultimate gift. Many local charities need your assistance providing services: teach someone to read, help at an animal shelter, mentor a child, pick up trash in the river. You can also donate items that you no longer want or use.
It feels good to know that you have given wisely. Happy Holidays to everyone!