‘Tis the season for annual appeals from our much-needed nonprofit community. It seems I open at least one request each day at this time of the year. And the immediate cash needs of our nonprofits have increased due to our state budget impasse. You’ve heard me say before that we who live in western Pennsylvania are lucky to have so many nonprofits in our region and now many of them are in crisis and are hopeful that their holiday appeal will reap some quick cash to sustain them until the budget negotiations are completed.
Philanthropy is based on voluntary action for the common good, a belief followed by many individuals in the U.S. According to Charity Navigator’s “Giving Statistics” found on their website, $358.38 billion was given in 2014, with gifts from individuals leading the way at roughly $258.5 billion.1
So, how do you use your funds available for charitable contributions most wisely? Here are a few of the things I consider:
First, donate to something that is important to you; a cause that you feel in your heart. You have worked hard for this money. Here’s your chance to make a difference in something you or your family care about deeply.
Second, in order to take advantage of a charitable tax deduction (which is the number one reason many people donate), you have to be sure you are donating to an organization deemed qualified by the IRS. Every nonprofit is required to have handy their letter from the IRS authorizing them as a tax-exempt organization. Don’t hesitate to ask for a copy or check the nonprofit’s website for that letter. You can also check third-party websites for detailed information on most nonprofits, as information such as a nonprofit’s tax return (Form 990) is public. GuideStar, Charity Watch and Charity Navigator are three of those types of websites that offer great information about specific nonprofits.
Third, does understanding how your money will be used matter to you? Most grants from foundations are not able to be used for operating expenses. Perhaps you would like to have your contribution, therefore, help with operating expenses, such as payroll and rent….all of which is needed to work toward fulfilling a mission. If you need to ensure that your contribution will be spent in a particular way, or would like the charity to have the luxury of using your money where they see fit, have a conversation with the development director or the executive director. Most nonprofits can easily handle a contribution that would be restricted to a certain expense or program.
Fourth, a few organizations involved in the nonprofit sector have developed a Donor Bill of Rights, which you can find on the Association of Fundraising Professionals website. This document lists ‘rights’ and expectations that donors should have.
Lastly, I prefer to donate to local charities. I want my limited funds to be used in my region to help my neighbors. And sometimes I can even see the work the local charities do and that matters to me.
‘Tis the season to be charitable. Our nonprofits need your support! Choose with your heart, but also choose wisely!