5 Steps to Informed Giving
Does charitable giving make you feel great? Well, it should! Simply follow these five steps and you’ll be giving with confidence to charities you trust in no time!
Step 1: Be Proactive In Your Giving
Start by identifying which causes are important to you, and be specific about the impact you want your donation to have. For example, maybe you are interested in helping people with a particular disease. A large national organization might be better suited to research and finding a cure for the disease, whereas another one, perhaps in your community, could be doing great work providing services to patients and their families. Once you are clear about your philanthropic priorities, start to pull together a list of charities that match your interests.
Step 2: Research before Giving
Next, begin to narrow down your list of charities by conducting some basic research.
- Make sure the charity you are considering supporting is a bona fide, tax exempt 501(c)(3) public charity (all of the charities evaluated by Charity Navigator meet this basic requirement). If you aren’t sure, ask for the organization’s EIN (Employer Identification Number) and then check our site to confirm its status.
- Examine the charity’s finances. Financially healthy organizations – those that are both financially efficient and sustainable – have greater flexibility and freedom to pursue their charitable mission.
- Ensure the charity is accountable and transparent. Charities that are an open book and follow good governance practices are less likely to engage in unethical or irresponsible activities.
Step 3: Discuss Results and Impact
A charity’s ability to bring about long-lasting and meaningful change in the world is the key reason for their existence and for your donation. So, before making a contribution, talk with the charity to learn about its accomplishments, goals, and challenges. Such conversations will give you insight into how well the charity knows where it stands and where it plans to go. Charities unwilling or unable to have this conversation may not deserve your support.
Step 4: Consider the Way You Give
- You’ve done your due diligence, so trust the charity to determine how best to spend your contribution. Giving without strings attached (through unrestricted donations), provides the charity the flexibility it needs to respond to changing demands for its services.
- Create a budget for how much you can (or would like to) give. Understanding the tax benefits of giving and spacing out gifts during the year (via automatic monthly donations) may boost your overall giving capacity.
Step 5: Follow Your Investment
Remember to follow up with the charity in six months to a year to find out how they’re using your money. You’re not looking for a list of itemized expenses, but instead a progress report to give you a sense of how responsive they are to you and if they can clearly communicate their progress.
- Once you are assured that the charity is making an impact, make a commitment to support their work for the long haul. Only with long-term, committed supporters can a charity be successful!
- But, if your charity can’t tell you what kind of results they created from your investment, go back to Step One and find one that will.