Donating to a charity is a great way to give back to the community and support a cause you care about. Before you send your hard-earned money to one, here are a few things you should know.
Research the Charity
Look at information about the charity’s mission and goals. How do they use the funds they receive? Is the charity transparent about that? Research and find out about the organization. That will help you learn more about the charity and whether they are legit or not. The more information you know, the easier it is to donate money to charity, knowing you’re choosing an organization that stands for what you believe in and puts in the hard work to reach out and help.
Consider Its Financial Health
Look at the charity’s financial statements. Does it align with their spending ratio? Ideally, a charity should use at least 75% of its funds on services and programs. If the fundraising and administrative costs are more than 25%, that’s a red flag. If the organization has a lower spending ratio, that warrants a closer look. Consider sending your donation elsewhere.
Consider the Impact
Will the charity use your donation to fund a particular service or launch a specific program? Will that service or program make a tangible difference in people’s lives? Will it provide aid and make the kind of difference you want to see in society? Choosing a charity with programs and goals aligned with your beliefs and values make this a more likely outcome. You can set out to make a bigger difference in the world with the right organization.
Understand Tax Implications
Donations to charity are typically tax-deductible. But fully understand how it will affect your tax returns and the limit on those deductibles. Keep records of everything. Talk to a professional to make sure you know how your donation will affect your taxes.
