6 Ways to Make Your Donations Go Further
Tis the season for giving. We receive mail and on-line requests, buy tickets for charitable events, and get solicited at work, the grocery store, drug store, the mall, and a zillion other places. Many charities do really good work in our communities but many also have very high administrative and fundraising expenses along with high executive salaries which means our donations don’t go as far as we want them to go. To make your charitable dollars go further, consider the following six recommendations:
- Bypass the large organizations (i.e. United Way, World Vision, March of Dimes, Ronald McDonald House Charities, Inc., ALSAC, The Salvation Army, etc.) in favor of small local non-profit charities (including the local offices of the large organizations) that have a 501 (c) (3) status (a non-profit status approved by the IRS). Bypassing the large organizations means the high salaries, administrative, and fundraising expenses are not deducted from your donation before being given to the smaller local charitable organization.
- Most non-profits are required to file a Form 990 annually which is a tax return that lists detailed revenue and expense information including executive salaries and how many employees are paid more than $100,000 annually. The form also tells the reader if the charity used contributions or saved them (put into a fund balance). The 990 is usually available on an organization’s website but if it isn’t, google it, call the organization and ask for a copy or go to www.CitizenAudit.org to review it on-line. Read the IRS Form 990 and if you can’t bear to read a long tax return, simply review the 2-3 pages of expenses and executive compensation.
- If you don’t know which charity to donate to, consult the list of charities on the 990 of the big organizations (i.e. United Way, World Vision, Inc.). These organizations have to list every organization they give $5,000 or more to. You get the benefit of their review of the organization without having to pay for the review. For example, why donate $1 to World Vision, Inc. when you can donate directly to one of the more than 80 charities they used donation dollars to contribute to? If World Vision, Inc. donated dollars to The Pittsburgh Opera (which they did), why make a donation to World Vision, Inc. when you can donate directly to The Pittsburgh Opera?
- If a charitable organization does not have a 990, ask for the financial statements (preferably audited). Churches (i.e. The Salvation Army, World Vision) do not have to complete a 990 but have to provide a copy of their audited financial statements if requested. Dry reading, yes…but informative. Call the national headquarters number and simply ask for the statements. You don’t have to tell them why you want the statements because the reason is irrelevant. Public charities have to provide public information.
- Don’t contribute your dollars through retail outlets. Not only do you not get the charitable deduction but there are often costs associated with collecting these funds that are deducted from your donation before the dollar reaches the intended organization.
- Recognize that at the end of the day, your donation is an investment in people. In order to help people, there are services (medical, physical, psychological) and things (educational, medical, basics) and the “right” balance differs vastly among the needy.