Donate Smart: How to Give Wisely This Holiday Season

smart donating

Remember the 2014 Ice Bucket Challenge? It was a social media giving phenomenon that started when three young men living with amyotrophic lateral sclerosis (ALS) inspired their communities to spread awareness about the disease. More than $220 million was donated to ALS charities worldwide, most of which was contributed to the ALS Association, the organization that championed the Ice Bucket Challenge.

A friend sent me an article shaming salaries of various executive leadership of the national organization, which sadly made him believe that the organization was a scam. Given my experience working with many organizations, both in-house and as a consultant, I reassured him that the ALS Association is legitimate and donations indeed go towards research and programs for those affected by ALS. In fact, thanks to the sudden outpouring of public donations to the cause, groundbreaking research discoveries have been made and drug development has progressed for ALS.

As a donor who wants to do good and give back, it’s easy to feel disheartened when exposed to scandalous articles that share half-truths and misinformation. That’s why now, more than ever, it’s important that we become educated donors and make informed giving decisions instead of being passive about philanthropy. With the holiday season upon us, thousands of organizations will be approaching the community with annual year-end appeals making it difficult to decide which ones to give to.

Here’s how we can become better-informed donors:

1. Remember why you want to give.

Whether to support a cause you care about, embrace the public good by “giving back” to society, to qualify for tax incentives, or reciprocate a request from a friend involved with charity, understanding what motivates you to become a donor will quickly narrow down your list of organizations to give to.

2. Establish a budget.

Determining how much you can or would like to give alleviates pressure you may feel when being bombarded with contribution requests. You can boost your overall giving capacity by allocating gifts in various times of the year whether it’s bi-annual, trimester or quarterly. Utilizing this trick may help you find gaps and identify which seasons you’re able to give more.

3. Understand that not all causes and campaigns are run by a registered 501(c)(3) organization.

The rise of crowdfunding campaigns and online portals has made donating a bit trickier because individuals and causes utilizing platforms such as GoFundMe or Kickstarter are not required to be associated with a charitable organization. Vet these types of contribution requests carefully to avoid actual scams and remember that donations to individuals are not tax-deductible.

… now, more than ever, it’s important that we become educated donors and make informed giving decisions instead of being passive about philanthropy.

4. Check the organization’s 501(c)(3) status.

If it’s important that your gift is tax-deductible, verify that the cause you’re contributing to is recognized by the IRS as a 501(c)(3) organization. You can check online by visiting the IRS website. If you can’t find the chosen organization listed on the IRS website, kindly ask the organization for a copy of their IRS determination letter.

5. Research the initiatives of a given organization.

Check out the organization’s website and social media. You’ll get a sense of who else is supporting the cause and what types of programs and services are offered to the population it serves. Information such as mission, accomplishments, the governing board and finances are public and readily available upon request or through watchdog institutions such as CharityNavigator and GuideStar.

6. Decide if the organization is actually making an impact.

Upon doing your research from the previous point, it’s important to consider what the organization has done, what impact has been made from fulfilling its mission and what successes and failures have resulted from its initiatives. While successes aid in understanding what works effectively, failures help recognize what can be improved. If the organization is newer, discover its plans for program execution and evaluation.

Becoming an informed donor not only ensures that you’ll contribute to an effectively operating organization, but will also enhance your giving experience. Further educating yourself as a donor will deepen your connection to a cause and will hopefully create a long lasting relationship between you and the organizations you choose to support.

It’s a win-win situation – you’ll be confident giving to causes whose missions you strongly believe in and your chosen organizations can be more sustainable thanks to your knowledge and support!

How do you determine what you give to during the holidays?

Feature Image via Maddie Greer

Rosie is a creative entrepreneur and philanthropist who manages a self-titled blog focusing on introspection and inspiration. Ask about her ever growing “cabinet de curiosités."

9 COMMENTS
  • Heather December 8, 2016

    Volunteering is a really great way to find out if you want to support an organization financially. You get to spend some time on the inside and can ask important questions. Donating your time is a valuable contribution on it’s own and can help you evaluate the organization. For an nonprofit insider’s perspective check out this article: http://nonprofitwithballs.com/2016/11/how-to-deal-with-uninformed-nonprofit-watchdogs-around-the-holidays/

    • Rosie December 8, 2016

      Thanks for sharing Heather, I follow NWB too! Love Vu and his sense of humor and light-hearted perspective given to an industry that’s truly addressing complex and heavy issues in our society. I agree, volunteering is a stellar way to learn more and become more involved. In addition to consulting for nonprofits, I also volunteer and am currently looking to serve on a board. As a donor and a consultant, I find it’s important to actually walk the walk and practice the same advice I give to charities!

  • Ashlee December 8, 2016

    I so appreciate you writing this. As someone who works for a nonprofit and managers a local giving website powered by GuideStar (www.GiveSmartOKC.org) my mission is to help people be more educated in their giving decisions. Many donors, like your friend, do not fully understand the importance of administrative costs or 501(c)(3) status. Thank you, again! I’m grateful for Darling Magazine in so many ways.

    • Rosie December 8, 2016

      Ashlee, thanks for sharing your website. I certainly could have gone off on a long tangent about administrative operations and sustainability (but that would be for another day, another article). You certainly know the importance of donor education and how it brings so much value to the community. Going to check out your website!

  • Jen December 8, 2016

    Even if you can’t give money, look into what you can donate for used goods! I have a lot of items that are still in good condition that I know someone else can get use out of, and I’m packing them all up and distributing them to local thrift stores that benefit local organizations, like hospice care and the humane society

    • Rosie December 8, 2016

      Jen, I love how creative you are being about contributing to the community! You are so right, money isn’t the only way to donate or help, there are so many other ways to contribute. So glad you identified an opportunity to renew use for your items!

  • Rosie December 7, 2016

    Kimberly, so happy you found this article of help and glad you were able to narrow down to two stunning organizations! I have not done work with Canadian Red Cross, but had done some extensive work locally as a blood drive coordinator during college for the American Red Cross. We went above and beyond in donor participation than ever before! I also love Doctors Without Borders!

  • Kimberly Manky December 7, 2016

    This is a well-timed article, as I’m going to be making a Christmas donation, and I wanted to be informed. I used a website called Charity Intelligence here in Canada, to read about the financial transparency/accountability, operating efficienty/program cost, and funding need. I have determined that the Canadian Red Cross and Doctors Without Borders are two organizations that I want to support as they are serving in Aleppo.

    • Rosie December 8, 2016

      Kimberly, so happy you found this article of help and glad you were able to narrow down to two stunning organizations! I have not done work with Canadian Red Cross, but had done some extensive work locally as a blood drive coordinator during college for the American Red Cross. We went above and beyond in donor participation than ever before! I also love Doctors Without Borders!

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