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