7 Factors to Consider When Choosing A Charity

I don’t know about you, but I’ve been considering charities lately, and figuring out just how to find the best charity to support with my money and time.  There’s a lots of good that can be done out there, plenty of charitable organizations that seek to do that good (or at least claim to do so…), and only so much that any individual is able to do to help.  How can you ensure your charitable contributions are doing good, and in particular, doing the sort of good you want?

The short answer is research, research, research!  I know, that’s not exactly what you were hoping to hear, but if you’re willing to put in the time and effort to do the research, you’ll go a long way toward ensuring that your money (and time, if you’re volunteering to help) does the maximum good.  There’s quite a few things you’ll need to look into, but to help get you started, here are several

7 Factors to Consider When Selecting a Charity

1. What You Seek to Accomplish: There are a lot of different charities out there; a good way to narrow the list down is to consider what you want to do with your charitable giving.  Are you looking to support education, eliminate hunger, promote animal safety?  Do you want to stay local with your charity or go international?  Do you want to go through a church or stay non-denominational?  Sit down and think about the goals you have, before you begin looking through charities.

2. What You Can Offer: You’ll also need to know what you can give to a charity before you search for one to support.  Do you have money, useful supplies or are you offering your time to meet the charitable goal?  Different charities need different things to do their work, so what you seek to give can help to narrow down your choices.  (Most charities will take money, though, so you’re probably good there.)  You might not know this, but some charities accept things like boats as donations. If you inherited an old boat that you don’t plan on using, this could be an excellent way to unload the vessel and help someone out in the process.

Even motorcycling can help charities in the right circumstances
Even motorcycling can help charities in the right circumstances

3. Whether the Charity Matches Your Goals: Alright, now that you know what you want to do and what you can give, it’s time to start the research into charities.  There’s quite a few methods to do your research, some of which I’ve laid out before (Justgive.org and the Better Business Bureau being two of top resources).  Your first thing to look into is whether the charity meets your needs.  You can look into the areas the charities help, the type of work they do, and what sort of donations they want to get some possibilities, when you can start determining:

4. That the Charity is Legit and Effective: Unfortunately, some charities are actually fronts for frauds to get money.  Some people who will try to use your concern and willingness to help in order to get money from you.  Before you give any money, you should be sure to research, research, research (yup, that phrase again) your potential charity to ensure that they are a legitimate charity.  While you’re doing that, also look into how effectively they will use your money, to ensure that you are doing the most good you can with your donations.

Side Note: You’ll see the ‘overhead ratio’ as you do your research, which is the amount of money that goes toward the administration of the charity (office supplies, salaries, etc.) as opposed to the charitable work itself.  It’ll be tempting to treat this ratio as a the effectiveness of the charity; the more money they put toward charitable work, the more good they must do, right?  But keep in mind that it doesn’t tell you anything about the actual impact the charity has, and trying to keep the ratio high can prevent charities from investing in goods and people that could make them more effective.  Add in the fact that most charities calculate it incorrectly, and the overhead ratio shouldn’t be a major factor in your donation decision.

5. If the Charity Provides Tax Benefits: It might sound a little callous to be thinking about your taxes while debating whether to help others, but it’s worth considering.  There is a tax credit available if you itemize your deductions, provided that you (and your chosen charity) meet the appropriate guidelines.  Probably not the top priority in choosing a charity, but being able to get a tax credit could enable you to donate even more (among other uses for the extra money).  Keep in mind that you don’t necessarily have to donate money to receive tax benefits. If you donate your boat to charity, you could receive a tax deduction in the amount of the boat’s value. In some cases, these boats are sold at auction. Then, once the auction has been completed, you will be given a tax deduction in the amount for which the boat sold.

6. That Your Donation Will Help (Or Is Even Wanted): It’s tempting to donate to major causes, like places that have been hard hit by natural disasters or other problems, but sometimes the recipients are more than capable of taking care of themselves and don’t want outside help.  Case in point, Japan, when recovering from the 2011 earthquake and resulting tsunami, requested only limited help, and didn’t need (or want) aid from organizations like the American Red Cross.  Making sure that your donation, particularly if earmarked for a specific cause, will actually do good, is always an issue to consider.  (Also, watch those earmarks in general; sometimes charities end up with too much money specified for a given cause or purpose, and they have to spend it ineffectively because, well, that’s legally all they can do with it.)

Side Note: This caution about wanted help applies doubly if you’re planning to volunteer your time, particularly in a foreign country or otherwise far away.  Unless you have special skills that are in limited supply in an area (and sometimes not even then), the expenses needed to feed and house you, as well as the confusion you can add to a chaotic situation, will mean that your presence will do more harm than good while, say, trying to help repair Haiti (to pick one example).  Instead, try to donate money to an organization that has experienced people who know how to help effectively.  (And spend your volunteer time in local groups that want your help.)

7. How to Support The Charity: With all of this research done, you should have settled on a charity that is legitimate, effective, meets your desired goals, and actually wants your money (or help) for its purposes.  At this point, you can look into just how the charity prefers to accept donations, and go through that method to give to your cause. (With the donation being non-earmarked; that way, the charity can put it toward the area where it can do the most good.)  If you want to deduct a monetary donation from your taxes, you’ll need to make sure that you get documentation from the charity about the amount you gave.  Then, you just have to figure out if this is a one-time donation, or if you wish to donate on a regular basis in the future (most charitable organizations make it easy to set up an automatic donation schedule).

There, your charitable giving is done (or hopefully, just started)!  What other issues do you think should be considered when choosing a charity?

Also, a hat tip to Cracked.com for an article covering several of these issues and inspiring this post; it’s amazing how useful a ‘humor’ site can be in considering issues like this.
Image Source: Wikimedia

Featured Image by by Army Medicine / flickr

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