This is the time of year many of us make our charitable contributions. Nonprofit, charitable organizations depend upon our support. In tough economic times, it’s especially important to give wisely.
The American Institute of Philanthropy has some guidelines that should help donors make wise choices. The group lists 10 steps toward smarter giving:
ä Know your charity. Don’t give to an organization you know nothing about. Honest charities will gladly provide you with a mission statement, list of board members, annual report and other details you’ll need to make informed choices.
— Get “bang for your buck.” Determine how much the group spends on programs and how much goes to fundraising. Established, efficient nonprofits might spend 75 percent or more on programs. Percentages may vary from one group to another, but an official should be able to give you information about numbers of people served and major program accomplishments in the past year.
— Don’t respond to pressure. If you don’t know enough to make an informed decision, ask for more information in writing. A good cause won’t be done in by waiting for your donation.
— Keep records of your donations. Don’t give cash, and don’t give your credit card number to a telephone solicitor or Web site you don’t know. For tax deduction purposes, be sure to get a receipt or letter acknowledging your gift. For tax-deductible gifts of more than $250, the IRS needs a receipt from the charity — your canceled check is not enough.
— Understand “tax-exempt” and “tax-deductible.” Not all charities qualify for tax-deductible contributions. If an organization is “tax-exempt,” it does not have to pay taxes. You may ask for the charity’s tax-exempt letter; if it doesn’t have one, you can’t legally claim your donation as a tax deduction.
— Don’t be misled by a name. A group’s name may sound like a familiar, legitimate charity; ask for information in writing to make sure your gift is going where you want.
— Don’t be swayed by emotional appeals. The hard-luck appeal is used by some groups that may be short on service. Ask for details about the ways your money will be spent.
— Consider registered charities first. Nearly all nonchurch charities bringing in more than $25,000 a year must file information with the IRS.
Right now Maine and 38 other states and the District of Columbia require charities to register. Consult the Department of Professional and Financial Regulation in Augusta for information (phone 624-8624, http://www.maine.gov/pfr/professionallicensing/professions/charitable/faq.htm).
— Beware of charities offering “gifts.” Address stickers, greeting cards and key rings are used to increase donations. If they are unsolicited (if you didn’t ask for them), they’re yours to keep without obligation to donate.
— Consider giving generously. When you are satisfied a charity is worthwhile, think about the difference a larger gift can make. There’s some wisdom to the advice, “Don’t give until it hurts; give until it feels good.”
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