Want to make your donation to charity count? Do your homework.

How to make your donation to charity count

Does it annoy you when cashiers ask for charity donations at checkout? It bugs more than a third of Americans.

In a survey conducted for software company PlanG, 35 percent of more than 1,000 people said they didn’t like it, and half said they didn’t care.

That’s even though 72 percent agree they were more likely to shop at a store that supports charities. And in a separate survey for the U.S. Agency for International Development, 63 percent said they have donated to charity for disaster relief in the past five years.

So it’s not like people don’t want to be charitable — but they may want to be a little more selective about it. Not all charities are created equal, after all. Some pay $100,000-or-more salaries to their CEOs while relying on volunteer staff, and others spend a huge chunk of your donation on raising more money.

Checking up on a charity

Many people already know where they want their money to go — 76 percent have charities they would support in mind, according to PlanG’s survey. But besides the name and cause, how much do you really know? There are easy ways to learn more.

  1. Look for a mission statement. This usually appears on promotional materials and the organization’s website. It sums up what the charity is about and what their goals are. This is a a quick way to check whether a charity’s mission aligns with what you care about supporting.
  2. Follow the money. You can’t ask a for-profit company how it spends all its cash and expect a straight answer. But you can do just that with legitimate nonprofits. They document it all — program expenses, fundraising, salaries — in a financial report that looks a lot like your taxes, called a Form 990. You can ask for a copy, or you can often find them online at sites like the Foundation Center.
  3. Ask the experts. While you can dig through a charity’s financial documents, it’s not always easy to understand them or compare them to other charities. But there are groups that do the work for you, like GuideStar and Charity Navigator. GuideStar “collects, organizes, and presents the information you want in an easy-to-understand format while remaining neutral,” while Charity Navigator uses a formula to rate and rank charities  by their financial health, accountability, and transparency.

Avoiding scams and making your donation to charity count

While most people are willing to lend a hand when disaster strikes, it’s a sad fact that scammers see tragedy as opportunity. Fake and impostor charities pop up overnight, ready to scoop up the dollars of well-meaning but busy people. It’s common enough that the U.S. Department of Justice and the FBI maintain a dedicated hotline (866-720-5721) to report that kind of fraud, and mention it every time a disaster like Typhoon Haiyan strikes.

Here’s how to avoid misuse of your donations:

  • Don’t cave to pressure. Don’t let people rush you into donating at the checkout counter, a traffic light, on the phone, or at your front door. You can always say you want to review the charity’s literature before giving, and a legit operation should respect that.
  • Try to avoid cash. Money is definitely a more useful donation than clothing or canned goods — unless a charity asks for those — but if it’s more than loose change, try to use a payment method with some protections. Cash is easily lost or stolen, and it doesn’t produce the paper trail a credit card transaction will. If you write a check, make it payable to the full organization’s name, not the individual you’re handing it to.
  • Beware charities named after disasters. If a charity’s name references recent events, it’s new — and even if it has good intentions, the charity may not be equipped to use your donation efficiently.
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