It’s the season of giving – and for criminals, it’s the season of taking. Every year, dozens of new “charities” conspire to rip off well-intentioned givers.
Follow these tips to make sure your dollars are going to good causes:
- Have a giving plan. Many times, criminals can thrive because people don’t really have a system or discipline in place to manage their charitable giving. They give on an ad hoc basis, often on impulse, and with no research into the organization. A holiday savings account can help you manage your charitable giving, gift, and vacation expenses this time of year.
- Research your charities. This is a process called due diligence. If a charity wants your money, you are absolutely justified in investigating it. How reputable are they? How efficient are they? Does 95% or more of your donation actually make it to those who need it? One resource you can use to start investigating a charity is CharityNavigator.org.
- Determine a charitable giving budget and stick to it. You know what you can afford. Don’t go over that budget – at least not on impulse. Give with your heart – but use your head.
- Don’t give on the street. Many street collectors are scammers. Don’t put cash in some collector’s bucket without doing some due diligence.
- Get a receipt. Legitimate charities can give you a receipt, which you can use to take a tax deduction. If you take the tax deduction, you can give more. No receipt? No deal.
- Ensure the charity is a legitimate 501(c)(3) tax exempt organization. To get the official IRS list, download Publication 78 from the Internal Revenue Service at IRS.gov.
- Write a check. This establishes a paper trail. Don’t give cash.
It’s not enough just to give. People can give and give, but without some controls on their money, their giving might not benefit anyone but crooks. The whole point of giving is to make life better for the people who are most in need.