We all know the cliché that it is better to give than to receive which many people who give will agree with and the holidays are the time when many people give more to friends and family as well as to various charitable organizations whether in the form of money or the actual gifts. If the spirit of giving has overtaken you this holiday season because you have been blessed and in turn you want to bless the needy and less fortunate with some of the best Christmas gifts 2014 as well as in cold hard cash, here are some tips on charitable giving. And not forgetting the tax deduction that is another incentive for giving before the end of the year for the deduction to be claimed on this year’s tax return.
Many of us prefer to give to various charitable to help them fulfill their missions which may or may not resonate personally with us. However you pick the organizations to donate to, we always want to ensure that our contributions are helping someone. In order to find the right and most helpful charitable organization, you should consider the following.
1. Non Profit Status
Just because a website ends in .org does not mean that it is a charitable organization. Anyone can purchase a .org domain name. You should instead verify that the charitable organization has been issued a 501(c)(3) designation by the IRS. This is important especially if you plan to claim your donations as deductions on your tax return. This designation also means that the organization makes financial information available publically. And also that the donations received are used for charity. Lastly, this designation also means that the organization follows the strict rules set forth on how much to spend on lobbyists in Washington.
To find out if the charitable organization you want to donate to is a 501(c)(3), go to www.GuideStar.org which is a nonprofit database and enter the organization’s name and see whether it is included in this database.
2. Mission Statement
Look for charitable organizations that have detailed mission statements and not just general “end world hunger” statements. Most reputable charitable organizations have very detailed mission statements on what they do to help you get facts and figures about the organization. If this information is missing even after requesting it, choose another organization.
3. Spending Ratio
With far too many “charitable” organizations, the portion of donations received that is spent on charitable organizations is negligible compared to the amount spent on running the organization. It isn’t enough to simply give your hard earned money to any so called charitable organization. You need to make sure that a significant portion of the donations received are being used to provide the help and services documented in the organizations mission statement. Any organization you donate to should be making a difference in the local, national or international community.
A productive organization that is making a difference should be spending at least 75 percent of their total budgets on programs and services that help the community they serve. The remainder is what is spent on general expenses for running the organization including salaries, fundraisers, etc.
To find out the spending ratio of various charitable organizations, simply look at their financials or by contacting the organization. You can also obtain the most up to date financials on various nonprofits by going to www.charitynavigator.org for various charities’ financial reports.
4. Are They Helping?
As mentioned previously, most people who make donations want to know that their donations are making a difference in the lives of the needy and less fortunate. Contact the organization and find out if they have an assessment from a third party entity on the organization’s effectiveness. Most organizations have this assessment done and can easily provide you with the report on the latest assessment on the organization’s results.
So while you are shopping for the best Christmas gifts 2014, do not forget the less fortunate. The holidays are an especially great time to donate to various charities (in addition to the tax benefits.)
If you want to help various organizations through purchasing gifts, various organizations sell a wide variety of merchandise that will make great gifts this Christmas while also helping the organizations. To view this merchandise for different charitable organizations and hopefully find something you like and would like to give as a gift, click here.