How to Make the Most of Your Charitable Donations

Smart Money lists nine steps to make the most of your charitable donations as follows:

1. Narrow your focus. Find a charity that focuses on the goals you want to see accomplished
2. Crunch the numbers. The important figure to look for is the spending ratio, which is the percentage of donations that goes to programs, vs. administrative costs. Generally, you want to donate to groups that spend at least 75% of funds directly on their programs.
3. Measure results. You probably also want to know if the charity you're financing is doing what it said it would do.
4. Check accountability. Make sure the charities you donate to are operating in an ethical and accountable way.
5. Concentrate your giving... Give a larger sum to one charity instead of splitting the money amongst several, can mean the difference between making a contribution and fully funding a project, even if your donation is small.
6. ...but limit earmarking. Asking that the charity use the entirety of your donated funds toward one specific area can hurt more than it helps.
7. Cut out the middleman. When a third party gets involved in your donation, less money makes it to the charity.
8. Keep an eye out for scammers. The best way to avoid being hoodwinked: Don't follow links in email solicitations, and don't give out your credit-card information to telemarketers. Also, make sure to confirm that the charity name and details in solicitations are exactly right — scammers often use similar-sounding names to legit groups.
9. Take advantage of the tax deduction. As most people know, there's a special present left for you if you donate before the end of the year: a potential tax deduction.

My biggest problem is #5. Every year, I decide that I'm going to concentrate my giving on a handful of charities. Then this charity asks for a bit, that charity asks for a bit, and so on. They all seem like such needy causes, and we end up giving a bit to many of them. However, in 2008 I'm going to really, really, really try to focus my giving on only a few charities that my wife and I identify with. We'll see how I do with that. ;-)

As for the other tips, many of them can be summarized by the following: be sure you're giving to a legitimate charity that does good work (passing most of the money you give on to the cause, not spending it on fundraising/salaries.) If you simply follow this guideline, you'll go a long way to making sure your gifts are maximized.

For more on giving, see these posts:

• The More You Give, The More You Receive

• Be Careful When Police and Firefighters Ask for Money

• Great Idea for Giving This Holiday Season

Comments

[crossn81]

I think this list is pretty much on the mark. But I have a problem with #5 as well, though for a different reason. You should give to what you are passionate about and unless you are giving to multiple organizations doing the same work, your gift is vital to each. For example, supporting 3 different food pantries might be ineffective, but giving to a food pantry, something like the Boy Scouts or Girl Scouts, and then something like an animal shelter is still an effective use of your money if each is a passion of yours.

The thought about fully-funding a project is valid. If you are concerned enough and connected to the organization you could always call and chat with a fund development staffer and talk about it, then you could reallocate your giving if you feel strongly about the project.

[JACK]

I actually disagree with #5 considerably. I think it represents a common misconception of what charitable giving is all about. #5 stems from one of two attitudes. The more innocent one is a mistaken notion that you give money so as to solve someone's need. The more egoist version is that the giver wants to control the charitable organization.

But anyone who has ever done any real charitable work knows that need outstrips my ability to solve it. In fact, often I'm unable to address the need at all. Charity, most of all, reveals my own need for charity. That's why you give to charity. Not to resolve someone else's need but to remind oneself of one's own need. Solidarity.

In that light, I do not think concentrating one's giving is necessary. Sure, the other things are practical. But I think again much is driven by a man-centered, misconception of what charitable work is all about.