Top 10 Facts You Should Know Before Donating to Charity

As the holiday season approaches, most people in the spirit of ‘giving’, start looking around for charities to donate to. It can be a challenge to decide which charity should receive your hard-earned dollars, especially when you are swamped with many calls and letters from charities asking for your donation. You find yourself asking “Do I want to help a charity that works with teenage girls?; “Is an orphanage more deserving?”; “Perhaps a seniors home may be a good place to direct my donation” ; or “Do I want to donate to a charity that builds schools in Indonesia?”

When you decide to support a cause, it is essential that you truly believe in what the organization is doing. Before you donate to a charity, start by finding out all about its mission and vision, and think about whether or not you share the same ideology. If the charity’s charter of activities sounds like the kind of thing you’d wish to be associated with, then you’ll feel good about donating to that charity.

Tips to Follow Before You Make a Donation to Charity

Giving to charity is a great way to show support for those in need. What isn’t easy is choosing what charity to donate to. Here are some tips that you can follow before you make a donation to charity. These will not only help find the right charity for you but also ensure that your money reaches where your heart truly is!

Research your charity. Before you make a donation, find out more about the charity. Charities are required to provide detailed information to interested donors. You can ask for written literature and a copy of the charity’s latest annual report. If a charity does not provide you with the information you request, you may want to think twice about giving to it. Honest charities usually encourage your interest and respond promptly to your questions.
Watch out for fake charities. Some fake charities use names that closely resemble those of respected, legitimate organizations. If you notice a small difference from the name of the charity you intend to deal with, call the organization you know to check it out. Ask for information in writing.
Don't allow yourself to be pressured. If you get a phone call asking for a donation, ask for details. Ask how the funds will be used and a number you can call back on. Ask for their website and say that you will donate online. If the callers are unable to provide you with any of those details or insist that you donate right now over the phone, hang up. It just might be a con! A bona fide charity would never resort to these tactics.
Check if the charity is registered. All charitable organizations and charitable solicitations must be registered. Contact the office that regulates charitable organizations and fundraisers to make sure that the charity you’re interested in is registered.
Find out how the money is spent. Ask how much of your donation goes for general administration and fundraising expenses and how much is left for the program services you want to support. Efficient organisations spend less than 40% on general administration and fundraising costs. Smaller organisations like Mustard Seed Canada usually have smaller administrative costs and most of the donations received go towards their mission.
Check for tax benefits. Be sure about what tax benefits you are getting from your donation especially if you give a large amount. Understand the difference between “tax exempt” and “tax deductible”. Tax exempt means the organization doesn't have to pay taxes. Tax deductible means you can deduct your contribution on your federal tax return. So an organization that has "tax exempt" doesn't mean you will be able to declare this deduction on your taxes. Be sure to ask for a receipt that clearly indicates "Tax Deductible".

According to Canadian laws, the first $200 you donate to a charity organization is eligible for a federal tax credit of 15% of the donation amount. After the first $200, the federal tax credit increases to 29% of the amount over $200. Generally, you can claim all or part of this amount up to a limit of 75% of your net income. You should consult with a professional accoutant to determine the best options for you and your financial planning.
Do not make donations at the doorstep. Sometimes strangers that claim to represent a certain organization, turn up at your doorstep asking you to make a donation. During the holiday season more people are likely to give donations and many cheats try to cash in on that fact. Call the charity. Find out if the organization is aware of the solicitation and has authorized the use of its name.
Do not donate to “current” disaster funds. Sometimes charities spring up overnight in connection with current events or natural disasters. You may feel compelled emotionally to make a donation. But practically, such charities may not have the infrastructure to get your donation to the affected area or people. The quickest way to help the victims of a disaster is to donate cash to an existing registered organization that already works in the affected area. For instance, an organization working for education in Indonesia will be your best bet if you wish to help rebuild schools after a tsunami.
Never send or give cash donations. Cash can be lost or stolen. For security and tax record purposes, it’s best to pay by credit card. However, do not give your credit card details on the telephone. You may also use cheques to make payments rather than cash. They are easier to track. Always keep proof of payment like receipts for your personal records.
Donate online. When you do a search online for a charity remember that non-profit website addresses mostly end in '.org' not '.com' or a series of numbers. A charity that solicits donations online is responsible for protecting your information. Read the charity's privacy policy before making a donation online. Only give donations through secure sites. An indicator that the site is secure may be a lock icon on the browser’s status bar or a URL that begins “https:” (the “s” stands for “secure”). However, if you are unsure about donating online, contact the charity and ask them for other ways to donate.

Most charities are honest and accountable to their donors. Mustard Seed Canada is an excellent example of an honest charity that is fully accountable to its donors and participates in programs such as the CCCC Seal of Accountability. If you are well informed you will choose wisely.

Once you are satisfied that the charity you are interested in is worthwhile, give generously and in return get the satisfaction that comes from giving.

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