Home > 2013 > Personal Finance

6 Tips for Donating to Charity the Smart Way

Advertiser Disclosure Comments 1 Comment

We are fast approaching the winter holidays and that means Salvation Army buckets will be making appearances outside stores across the U.S. But it’s not just the Salvation Army that ramps up its fundraising during the happiest season of all. A 2011 report from The Chronicle of Philanthropy found that nearly 70% of Americans believe it is important to give to charities during the holidays.

For many of us, donating to the less fortunate is just as much a part of the season’s celebration as tinsel and carols. However, don’t let your warm and fuzzy feelings lead you to make bad decisions when it comes to donating to charities.

1. Pick Your Passion

Of course, before you can donate to a charity, you need to find one. Start by considering what fires you up. What would you change about the world? Which injustice would you right if given the chance?

From curing childhood cancer to saving the oceans, there are charities for virtually every cause. Once you settle on your general area of focus, decide whether you want to donate locally, nationally or internationally. If you are concerned about hunger, you could donate to the local food bank or perhaps you’ll feel called to help those in developing countries. It’s your call.

2. Check Out Your Charity

After you know your cause, it’s time to find a charity worth your money. You could do a Google search, but you are better off going to a dedicated site like Charity Navigator or GuideStar.

According to Giving USA Foundation, Americans donated more than $316 billion to charitable causes in 2012. With so much money at stake, charity scams can be big business for rip-off artists who prey on others’ good intentions. Some so-called charities aren’t even registered tax-exempt organizations and are simply a front to siphon money into the owner’s pocket.

Avoid being duped by charity scams by double-checking any charity’s credentials through Charity Navigator, GuideStar or Give.org, which is run by the Better Business Bureau.

3. Watch Out for Excessive Administrative Expenses

Next, even if your charity is legitimate, that doesn’t mean your money will be used wisely. Before you donate to Kids Wish Network — dubbed America’s worst charity by one report — you probably should know it spends less than 3% of its money on actually granting kids’ wishes.

According to the BBB Wise Giving Alliance standards, a charitable organization should spend at least 65% of its money on program expenses — that is, activities directly related to its cause. While 65% may be the bare minimum, you can find many charities that go above and beyond. For example, consider Feeding America, which spends a whopping 97.9% of its budget on program expenses.

4. Make Your Money Work Harder

Once you’ve made a couple of donations, your mailbox is likely to begin filling with solicitations. It may be tempting to spread the wealth and give a little here and a little there, but your money will go further if you concentrate your donations on one charity, advises Charity Navigator on its website.

Remember, each organization has handling and processing costs associated with receiving your donation. There may not be much left of your small donation after those costs are worked into the equation.

5. Donate Directly

Never make a donation to a telephone solicitor.

First, they may not even be legitimate. Telephone charity scams use names similar to well-known organizations or they may say they are raising money for causes that tug at the heart strings such as supporting military families, veterans or police officers. In reality, your money will be used to profit the person calling and do nothing more.

Second, even if it is a legitimate charity, by donating over the phone, there is a very good chance only a small portion of your money will actually make it to the organization in question. A report from Michigan Attorney General Bill Schuette found that, on average, only 35% of the gross proceeds raised by third-party fundraisers in that state actually went to charities.

6. Give More Than Money

Finally, don’t forget that your favorite charity can likely use more than just your money. Soup kitchens need hands to serve food; environmental groups need feet to survey land. If you have a particular skill such as Web design or marketing, you may be able to donate those services too.

Volunteering is a win-win. It means less money a charity must spend on hired help, and it gives you a chance to walk the walk and actually make a difference. And that is a warm, fuzzy feeling no check can match.

This post originally appeared on Money Talks News.

More from Money Talks News:

Image:  Fuse

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

  • Lana Jhutti

    Donating is a fast and simple way to help those in need, but we have to make sure we are giving to a cause that truly deserves it. Making a difference can be as easy as finding anything we don’t use and giving it away to those who can truly take advantage of all the benefits that item may hold. I donated an old car to and it was great knowing I gave it to a charity that takes the car and actually gives it to someone who can really use it to change their lives and allow them to enable so many new possibilities that were limited due to a simple lack of transportation. They accept running and non-running vehicles to provide transportation and even financial aid. I know that they are non-profit and really use everything they get to help people. In such tough times, I think we can all do a little something to help, especially for a cause that makes such a great difference for everyday people limited by what is a necessity.

Certain credit cards and other financial products mentioned in this and other articles on Credit.com News & Advice may also be offered through Credit.com product pages, and Credit.com will be compensated if our users apply for and ultimately sign up for any of these cards or products. However, this relationship does not result in any preferential editorial treatment.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Our Owners

Credit.com is owned by Progrexion Holdings Inc. which is the owner and administrator of a number of business related to credit and credit repair, including CreditRepair.com, and eFolks. In addition, Progrexion also provides services to Lexington Law Firm as a third party provider. Despite being owned by Progrexion, it is not the role of the Credit.com editorial team to advocate the use of the company’s other services. In articles, reporters may mention credit repair as an option, for example, but we’ll also be sure to note the various alternatives to that service. Furthermore, you may see ads for credit repair services on Credit.com, but the editorial team isn’t responsible for the creation or implementation of those ads, anymore than reporters for the New York Times or Washington Post are responsible for the ads on their sites.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team