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GIVING TO CHARITY can be a wonderful thing.
At the same time, in today’s world you have to use
your head to determine whether a nonprofit organization will make the most of your donation.
Just because a charity claims to do good, or
stands for a cause, doesn’t mean it’s performing well
and that your donation will be put to good use.
Take your giving seriously. Research and evaluate a nonprofit before you open your wallet. Here
are some basic steps you can take to better educate
yourself before you give.
Get clear on your goals
Don’t just give money based on emotion or
because you are solicited to give. Take the time to
establish giving goals and write them down. Ask
yourself: Why do you want to give? What issues are
you the most passionate about? What are some
unique ways you could give back in general? Think
about how your life experiences and your passions
could intersect so you can make the greatest impact.
Although Fight Back! does not endorse independent charity evaluation services, it is one way to
gather information. As a rule, you should always be
thorough and double-check any information you
research online to make sure it’s completely accurate.
Charity Navigator ( charitynavigator.org), the
American Institute of Philanthropy (charitywatch.
org), Give Well ( givewell.org) and GuideStar (guide
star.org) range in the information they provide.
Compare your findings on these sites, as they do not
all offer the same information.
Also conduct a general online search to find
complaints about an organization. Searching the
name of the organization along with the word “
complaint” or “scam” is one way to research its reputa-
Being cautious with
your donation dollars
tion. And before you give, confirm a charity is
eligible to receive tax-deductible donations by visiting the IRS website at apps.irs.gov/app/eos. There are
various tax documentation requirements that must
be met to permit a tax deduction for charitable
donations. Consult your tax adviser or the IRS website for more information on what’s required.
Evaluate reports and financials
If you have financial expertise, you can evaluate
a charity by reviewing its annual reports, audited
financial statements and IRS Form 990, which is the
basic filing document for nonprofits. These documents may be found on an organization’s website, or
you can ask the charity to send them to you. If a
charity refuses to provide you with information, it’s
a red flag.
Form 990 includes information on employee
salaries, asset and liability ratios, and contributions.
If you are not familiar with Form 990 or how to read
it, educate yourself with online research.
If it is still unclear, it’s wise to consult a certified
public accountant with expertise in nonprofit
accounting. To find a list of CPAs in your area, visit
the American Institute of CPAs at aicpa.org. Click
“For the Public,” then “Find a CPA.”
Volunteering with an organization that aligns
with your charitable goals before you donate is the
best way to research. Seeing for yourself how an
organization is run will provide important insights
into its business practices.
Be on guard for charity scams
Scammers commonly use a name that closely
resembles that of a better-known, reputable organization as well as other tactics to steal your money.
Carefully check the name and address of an organization, and verify all of its identifying information
before you donate.
Take these steps to ensure you make an impact
with your dollars. The last thing you want is for your
money to go to waste. C
IN ADDITION TO being on
guard for sound-alike charities, avoid any charity that:
•Refuses to provide
about its identity,
financials or how your
donation will be used
• Won’t provide proof
that a contribution is
• Tries to get you to
and uses high-pressure tactics to get you
to do so
•Asks you to wire
money or make a
•Offers to send a
courier or overnight
delivery service to
collect a donation
stakes winnings in
exchange for a contri-
bution. By law, you
never have to give a
donation to be eligi-
ble to win a sweep-
These red flags are all
signs of a charity scam.
Don’t get taken. C