Giving back wisely: A guide for choosing the right charity

Published November 13, 2024

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• Spending & Shopping
• Taxes

Tis the season for giving. Giving gifts to your loved ones and giving charitable donations to those in need. 30% of annual giving occurs in the month of December. But how can you ensure your charitable donations are making a real impact? With countless charities vying for your attention, it can be challenging to determine which ones are truly deserving of your support. Here’s a guide to help you vet charities and avoid scammers:

Research the charity’s mission

First and foremost you must make sure the mission of the charity you are giving to is one that you can stand behind. A clear mission statement tells you what the organization intends to accomplish, and what causes they support. If it resonates with your personal values and priorities, you’re off to a good start. A well-established charity or non-profit will have a website which outlines their goals and ways you can help.

Check the charity’s financial health

Reputable charities provide detailed financial information on their websites so you can see exactly where your money is going after you give your donation. Look for organizations that allocate a significant portion of their funds directly to programs and services.

Websites like Charity Navigator and GuideStar offer ratings and in-depth reports on various charities. You can also search the public charities filing database for the Attorney General’s Office of Massachusetts here. They oversee more than 25,000 charities in the state ensuring they follow proper regulations and provide transparency to the public.

Evaluate the charity’s impact

A good charity can quantify its achievements and demonstrate how donations are used effectively. Review the charity’s annual reports to assess its progress and impact. Check its website as well as any social media pages to find other organizations they may be involved with.

It’s also a good sign to see that a charity has an online presence. Having many followers who like and comment on social media posts tells you they have trust within the community. Read online reviews and search for news reports about the organization. You may be surprised by what you find in the press.

Beware of Scams and Misleading Tactics

Unfortunately, there are scammers who will exploit your kindness and empathy. And charities with shady practices that may choose to line their pockets with your donations instead of investing into programs that help their cause. Properly vetting the charity can ensure that not only are they legitimate, but their donations are going toward something meaningful.

• Verify the charity’s registration: Ensure the charity is registered with the appropriate government agencies. Gifts to a non-qualified charity are NOT tax deductible.
• Avoid high-pressure tactics: Legitimate charities won’t pressure you into donating immediately. A sense of urgency could be a red flag that you are facing a scammer. DO NOT click a link in an email or text you weren’t expecting that is pressuring you to give. Phishing is the number one cybercrime.
• Be wary of emotional appeals: While emotional appeals can be effective, be cautious of organizations that rely solely on emotional manipulation.

You can file complaints about charities or non-profits on mass.gov if you believe they are behaving unethically or misappropriating funds.

Consider a Donor-Advised Fund

A donor-advised fund (DAF) is like an investment account specifically for donating funds to charities you care about. How it works: you make contributions that are immediately tax-deductible. While the funds are in the account and you’re deciding which charities to support, your money can grow so you can give even more.

These accounts are managed by professionals who will disperse your funds to charities you choose when you advise them to. It’s a good option to grow your giving power over time for larger grants that make more of an impact. And, the flexibility gives you more time to properly research charities first.

By using this guide, you can feel confident in making charitable donations that align with your values and make a positive impact on the world. Remember, to watch out for red flags that could indicate a scam like a sense of urgency, lack of online presence or professionalism, and manipulative emotional appeal.

 

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