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Most charities rely heavily on the goodwill of individual donors during the holiday season to fund their activities throughout the coming year.
Last year, charity contributions totaled $307.65 billion: 75 percent of this total came from individuals, according to the Giving USA Foundation.
BBB’s Wise Giving Alliance advises donors to research a charity prior to giving and provides five questions to ask when deciding where to contribute this holiday season.
Is this a charity I can trust?
Look at the appeal carefully; some charities’ names sound the same. Don't be fooled by names that look impressive or that closely resemble the name of a well-known organization. Check with your appropriate state government authorities (this is usually a division of the state’s office of the attorney general) to verify the charity is registered to solicit in your state.
Also, visit the Web site of the BBB Wise Giving Alliance (www.bbb.org/charity) to find out whether a national charity meets the 20 BBB charity standards that address charity governance, finances, fund raising, donor privacy, and other accountability issues. For assistance with local charity appeals, contact the BBB serving your area (www.bbb.org).
How will the charity use my donation?
Ask questions about how your donation will be used. Beware of appeals that bring tears to your eyes but tell you little about what the charity is doing about the problem it describes so well. For example, if the charity says it’s helping the homeless, do they explain how (shelter, food, medical care) and where this is taking place?
Watch out for statements such as "all proceeds will go to the charity." This can mean that only the money left after expenses, such as the cost of written materials and fund raising efforts, will go to the charity. These expenses can be high, so check carefully.
Is my donation tax deductible?
If you want to take a charitable deduction for federal income tax purposes, make sure the organization is tax exempt as a charity under section 501(c)(3) of the Internal Revenue Code. A charity appeal will usually include reference to this. To verify a charity’s tax status, access an IRS database of organizations by viewing Publication 78 on the IRS Web site at www.irs.gov.
Can the charity actually use what I’m donating?
All charities welcome the receipt of monetary donations, but some also solicit in-kind donations such as clothing, food, and toys. If you’re planning to donate items to a worthy cause, make sure you know the in-kind contributions your charity prefers. For example, a food bank may prefer food items that are not perishable such as canned goods, and a toy drive may be seeking new and not used toys.
Am I feeling pressured to give?
Don't succumb to pressure to give money on the spot, either immediately over the phone via credit card or by allowing a "runner" to pick up a contribution. Take the time to research the charity fully; the charity that needs your money today will welcome it just as much tomorrow.
For more advice on giving over the holidays and to view reports on charities visit www.bbb.org/charity or call 1-800-388-2222.