Financial Lessons in Making Charitable Donations

Thursday, March 11, 2021
   
charitable donations blog image of girl holding a dollar bill

We all want to make our world a better place, and charities give us a way of doing that. Ideally, we’d volunteer and contribute hands-on time to those in need. In reality, though, we just don’t have time to spare, so we give what we can to help a cause that resonates with our values. 

Often, that means giving money—the fuel that powers every charity’s mission. For your gift to be effective, the cause must be worthy. Unfortunately, there are plenty of scams and dishonest operations out there to make anyone second guess their decision to donate. Here’s how to make sure your charitable donations will count and do the most good.

Ensure You Have the Correct Organization Name

Words can be reordered or tweaked to make you think you’re dealing with a well-known, bona fide charity, but you may not be. Make sure you can identify the official names of authentic charities versus copy-cat schemers misrepresenting who they really are.

Research the Organization

Always do your homework on any organization you plan to give money to (and not just on their own site). Be sure to see what others have to say about their practices, too. To speed up the process, add the term scam after the organization name. Often, if the organization’s ethics are questionable—or if it’s a scam—you may find anything from complaints or news articles to arrest reports or lawsuits.

Check Charity Watchdog Sites

Sites like Charity Navigator not only list charities by name but also include detailed information on their financial performance as well as accountability and transparency. Another worthwhile site is GuideStar. You can explore program listings, awards and more for your potential recipient charity. Also, don’t forget the Better Business Bureau’s Wise Giving Alliance site and its accountability assessments addressing governance, results reporting, finances, and truthful and transparent communications.

Check with Government for Charity Legitimacy 

You may want to check with the state where the charity is based or operates. Each state has its own offices regulating charities. For example, in Louisiana, it’s the Department of Justice’s Public Protection Division in Baton Rouge. You can find a list of the proper authorities by state at the National Association of State Charity Officials website.

Choose Local Organizations 

If you want to make a difference, chances are, you won’t have to look far. People in your own community are trying to better their corner of the world. Sometimes, they’re a local affiliate working as part of a much larger organization. Sometimes, they’re small but well-organized independent groups, growing as they do their part. Either way, they’re people you know who are doing good deeds where you can see the benefits first-hand.

Never Feel Rushed to Give

We suggest never making donations over the phone or via doorstep visits. These types of requests carry a high likelihood of fraud and could put you at risk. However, legitimate charities looking to add to their repeat-donor family will answer questions and issue the receipts that you need to claim your gift as a legitimate charitable donation on your taxes. 

Yes, charities have urgent needs, but their mission will still require contributions a week, a month or even a year from now. You have the right to ask how your money will be used and receive a satisfactory answer and an official receipt. For tax purposes, you should keep a record of any donations you make which includes the charity name, date made and donation amount.

Want to Protect Your Money?

At La Capitol Federal Credit Union, we understand the power of community and the good that money invested wisely can create. We want to help you build your wealth so that we all can help to make our world a better place. Visit our site today for financial education resources so you can make the best decisions for your money.