Being Safe When Making Charitable Donations

As we head towards another year end, you will begin seeing more attention being given to those in need. Just look at the recent news story of the New York City Police Officer buying boots and giving them to a homeless man as proof. My blog has its own Salvation Army Red Kettle to get others in the giving spirit to make donations as well.

My guess is that there are a handful of “events” that lead to charities getting more attention during this time of year. First off, it is getting cold outside. Most don’t worry about others having warm shelter when its 70 degrees at night and you are relaxing at the beach. Secondly, people are getting their taxes in order and charitable deductions are a big write off for many. And third, it’s the holidays so we focus on giving and this includes giving to those who are in need the most. As a result of all of this, December tends to be the most generous month for donations.

Americans as a whole are generous people. In 2011, we gave more than $298 billion to charities. Of this amount, $211 billion was given by individuals or household donors. The rest was made by corporations and other entities.

If you are looking to donate this year, there are some precautions you should take. After all, with so many people making donations, scammers are prevalent.

giving to charity

Steps to Protect Yourself

Your first step should be is to go to the IRS website and search for the charity you are looking to donate to. Note that not all charities are listed here. If a certain charity it not, it does not necessarily mean it is not legitimate. You can ask the charity for its IRS tax-exempt letter.

You can also visit the website, GuideStar, which lists close to 2 million nonprofits, all having met IRS guidelines.

If your nonprofit is not listed on any of the options above, again it does not mean they are fraudulent. In fact, many small local nonprofits don’t meet the IRS tax-exempt guidelines. So the high school kids promoting a car wash for their band trip or the beef n’ beer event for a fallen police officer is not a scam. Just make sure you investigate the charity before donating. For the school car wash, you can check with the school to see that it is backing the students. For the event for a police officer or firefighter, it is best to call the department and verify the event is legitimate.

If you feel as though you were targeted in a charitable scam or you made a donation to a charity that you think is a scam, you need to contact your State Attorney General. They are the ones that oversee charities in your state.

Final Thoughts

There are many great charities out there and all rely on your generosity to continue running. This post was not intended to scare anyone away from making donations, but rather to educate you so that you know your donations are going to the good of others and not into some scammer’s pockets. While it is great to donate to large, well-known charities (most of which can be found on the IRS website above), most prefer to donate to local causes. Just be prepared to do your homework before making the donation.

2 Responses to Being Safe When Making Charitable Donations

  1. Good point on being educated when giving. If I give to something nationally, or locally as well, I always look at how much is being eaten up by administrative costs. I want to have the money I give reach those that need it and not be nickeled and dimed before it gets to them.

  2. Some interesting points. I’ve never considered that a charity I donate too could be dodgy, even though I’m fully aware it happens.