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CHARITABLE GIVING
Before You Give
Many Americans regularly seek to help those less fortunate
than themselves, or to support causes in which they believe,
by making donations to charitable organizations. Our nation's
charitable mindset benefits countless worthy groups, while
often lowering the tax bills of the givers. But it also
brings out the worst in a few people-and some of them
are in more of a taking than a giving mood. How can you
determine whether a charity is legitimate? Here's a checklist
of items to consider.
- Know whom you're giving to.
Don't give to organizations you don't know without doing some homework.
Instead, ask where you can learn more about them, research the group, and contact
them if you decide to give.
You could check with your local better business bureau or your state’s attorney general’s office to find out more about an organization.
- Find out whether the organization is tax-exempt.
Most legitimate charities have either obtained or applied with the IRS for
tax-exempt status under section 501(c)(3) of the tax code.
You can check an organization's tax status by visiting websites such as http://apps.irs.gov/app/pub78 or www.guidestar.org. Keep in mind, though, that the websites may not always contain the most up to date information. If you're considering giving to an organization that isn't listed on the sites or in an IRS publication, ask the group for evidence that it has applied for 501(c)(3) status.
Note that houses of religious worship such as churches, synagogues, mosques and temples are not required to apply to the IRS to be qualified as charities, so a contribution to such an organization will generally be deductible even if it does not appear on the IRS list.
And remember, you can also make tax-deductible contributions to government
entities, like states, municipalities, or federal relief agencies. - Use a check or credit card instead of cash.
For large contributions, use a check or credit card. They're easier to track
for tax purposes—and harder for an illegitimate charity to misuse.
- Don't give personal information to organizations you
don't know—especially over the phone.
If an organization you don't know calls you directly to ask for funds, don't
give out your credit card number, Social Security number, or other personal
information. Instead, research the organization and, if you decide to make a
donation, initiate the call yourself.
- Ask where your money is going—and how much is
going to overhead.
Charities should be able to explain how they'll use your donation, including
how much will go directly to victims and how much will go to the organization's
overhead. Some sham organizations funnel most of their donations to overhead
like excessive salaries—and very little to the people they claim to serve.
- Pay attention to the organization's name.
Some organizations choose names that are similar to well-known charities in an attempt to mislead donors. Be careful of solicitations by charities that have unfamiliar names or do not have programs in your community.
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