Charitable giving can be a great way to honor or remember a loved one. Also, a donation to a nonprofit is a wonderful way to support a cause that you feel is doing important work in the community or world.
The following are some tips to help make sure that your charitable donations are put to the best use.
1.Any nonprofit that you donate to should be able to easily give you proof of their registered nonprofit status upon request.
In the United States, to have recognized nonprofit status, entities must register with the Internal Revenue Service and meet its requirements for a nonprofit. In turn, the IRS send the nonprofit a IRS Letter of Determination of Nonprofit 501(c) (3) status. This document shows that the nonprofit is officially recognized as having such status. If you should have any question about a nonprofit, ask to see proof of their status.
2.Find out how much of your donation to a nonprofit will go to program and how much to administration.
Inquire about the nonprofit’s program to administration spending ratio. Watchdog groups such as Charity Navigator and Guidestar will give you what they consider acceptable ratios, but having worked in the nonprofit section for more than 15 years, I would say at least 75% of funds should be spent on program.
3.Nonprofits that call you seeking a charitable donation, should be able to easily send you information in the mail upon request.
For nonprofits that you are not very familiar with but may be interested in making a donation to, have them send you donation information in the mail. If they get impatient with you or refuse to do so, this is a major red flag.
4. All nonprofits should send you a receipt for your donation showing how much of your donation is tax-deductible.
You will need this receipt if you are itemizing on your tax return. Also, it is always smart to have proof that your donation has been received and processed.
A donation to a nonprofit can be a powerful and wonderful gift. Just take a few minutes to educate yourself to make sure that your donation does as much good as possible.