Is Your Favorite Charity Using Donations Responsibly?

Britney Balderas | Posted on September 12, 2016 |

Making a donation to charity can be a rewarding experience and make you feel better about yourself as a person. However, you should be aware that not all charities will use your money responsibly. In fact, some charities are nothing more than scams that designed to take your money and fund a con artist’s lifestyle. How do you know that your favorite charity is using your money responsibly?

Do Your Research

The Federal Trade Commission is a valuable resource for those who are interested in giving to a good cause. For instance, they can help you spot the characteristics of a scam as well as how to find out more about a particular charity, what it does and who is in charge of managing the money it receives.Taking this step makes it easier to establish that an organization is legitimate as well as the odds that it will use your money in a responsible manner. In addition to resources offered by the FTC, you can check out sites such as Charity Navigator or Charity Watch to find out the best and worst rated charitable groups in America.

How Much of Your Donation Goes to Charitable Causes?

It is important to understand that even a nonprofit has costs and other expenses that it has to cover like any other organization. Therefore, it is not realistic to assume that 100 percent of your donation will go toward the cause the charity aims to help. For instance, it may pay employees, executives or professionals who will raise funds on behalf of the organization. It may also have costs related to buying gifts used in fundraising auctions or as gifts to donors. However, a charitable organization should use the majority of your donation to help others. Before you write a check, ask in a direct manner how much of your money actually goes toward food to help the homeless or will be used to provide an education to kids in need.

Other Questions to Ask Before Giving to a Charity

There are several other questions that you should ask to determine if a charity will use your money properly. For instance, the charity should be able to tell you exactly what your gift will be used for in addition to the exact reason you are being asked to give in the first place. As charitable donations can be deducted from your taxable income, it may be a good idea to ask for its federal tax ID number. If that cannot be provided, your favorite charity may actually be a scam or otherwise run in an incompetent manner. You should never respond to requests for donations via email unless you actually provided your email address. Also, never make a donation via a wire transfer. Ideally, you should use your credit card as you may be protected against fraud, which means you may be able to get your money back if you find out that you have been scammed. A charitable donation can help make your community a better place to live. For the most part, charities do their best to use your money in a responsible and effective manner. However, you can’t take everything you see or hear about a group at face value. Therefore, it is critical that you do your research to help you make an informed decision and ensure that your money will legitimately assist someone in need.