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Make Sure Your Holiday Charity Contributions Count

by Sherri Allen

man with bell seeking holiday charity donations

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Use these guidelines to help determine which charities best spend your donation on the people and causes you want to support.

As the holiday season approaches, many thoughts turn to helping those less fortunate. In fact, surveys have indicated that over 50 percent of all donations to charity are made between Thanksgiving and Christmas. It's important, however, that you don't make charitable contributions indiscriminately. By following a few precautions, you can ensure your generosity provides maximum benefits for the people and organizations who need your help.

The Federal Trade Commission suggests you follow these guidelines:

  • Be wary of appeals that tug at your heartstrings.
  • Ask for the name of the charity if it's not provided promptly.
  • Ask what percentage of the donation is used to support the causes and what percentage is used for administrative costs.
  • Call the charity to find out if it's aware of the solicitation and has authorized the use of its name.
  • If the solicitation claims that the charity will support local organizations, call the local groups to verify.
  • Discuss the donation with a trusted family member or friend before committing the funds.
  • Don't provide any credit card or bank account information until you have reviewed all information from the charity and made the decision to donate.
  • Ask for a receipt showing the amount of the contribution and stating that it is tax deductible.
  • Understand that contributions made to a "tax exempt" organization are not necessarily tax deductible.
  • Avoid cash gifts. They can be lost or stolen. For security and tax record purposes, it's best to pay by check - made payable to the beneficiary (charity), not the solicitor.

The Internet also provides some excellent resources for researching charities before you make contributions. Here are a few:

  • Charity Navigator (http://www.charitynavigator.com/) -- Charity Navigator helps charitable givers make intelligent giving decisions by rating and providing information on over 3,100 charities. You can search their extensive charity database by category, region or keyword.
  • Better Business Bureau Wise Giving Alliance (http://www.give.org/) -- This organization developed "Standards for Charity Accountability" to assist donors in making sound giving decisions. You can read their evaluations of charities based on their compliance with these voluntary standards.
  • American Institute of Philanthropy (AIP) (http://www.charitywatch.org/) -- The AIP is a nationally prominent charity watchdog service whose purpose is to help donors make informed giving decisions. They produce the Charity Rating Guide and Watchdog Report, which provides information on approximately 500 national charities. At Charitywatch.org you will find a list of the charities that receive the highest ratings from AIP, as well as tips and hints for giving wisely.

Don't risk ruining your holiday spirit by finding out the charitable contribution you made went to an organization that spends your money unwisely or in a manner other than what was represented. By doing just a little homework, you can be confident that your donation is spent on the people and causes you want to support.

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