6 tips to being a smart donor
By Cherrish Holland
There are over 1 million charities and foundations in the United States, more than double the number of organizations from just 15 years ago.
Needless to say, the competition for funds has become quite intense. The recession has created an environment in which less government funding sources are available, but there is also an increased public demand for services. Nonprofits, in turn, are asking for additional support from donors.
Increasing numbers of charities are using high-tech fundraising techniques. Mailboxes overflow with fundraising appeals and phone calls pour in from high pressure solicitors. All of this can leave you confused about which charities are most deserving of your contributions.
Most charities are honest and accountable to their donors - but a few are not. The following are tips to be a smart donor.
Know your charity
Many people are choosing to narrow their giving focus so that their contributions will have a bigger impact. Choose charities that speak to your heart, but get to know more about their work and how they operate so that you can make more informed decisions.
Research how many individuals are served annually or what the charity's major accomplishments were in the past year. If a charity does not provide you with the information you request, you may want to think twice about giving to it. Honest charities typically encourage your interest and respond to your questions.
Follow the money
Check out charities' websites to see what percentage of contributions go directly to service. How does that percentage compare to what is being used for administration and fundraising? This information can also be found by looking up the nonprofit at charitynavigator.org.
Do not let yourself be pressured into contributing on the spot, especially if you are not familiar with the organization. No legitimate organization will pressure you to give immediately.
Beware of gifts
Direct mail solicitations are often accompanied by greeting cards, address labels, calendars, note pads or other gifts. Charities do this because it can increase donations. But do not feel that you have to make a donation to keep these gifts. It is against the law for a charity to demand payment for any unordered merchandise. Also be aware that the enclosed items can mean higher fundraising costs for the organization.
Name sound familiar? Double check!
Some questionable charities use names that closely resemble those of a respected, legitimate organization. If you have any questions, check them out with your state charity registration office before making a contribution.
Use caution with emotional appeals
Beware of organizations that try to tug at your heartstrings but give very little information about the charity itself and what they would use the money for.
Once you are satisfied that the charity is worthwhile, give generously if you can afford to. There are many good organizations that need your help to operate valuable programs and provide needed services.
Cherrish Holland is a certified financial counselor with Lutheran Social Service in Willmar and specializes in budget and debt counseling. She contributes to the blog Sense and Centsibility at senseandcentsibility.areavoices.com.