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Give to Charity Without Getting Taken

Americans gave an estimated $241 billion dollars to charity in 20021, and members of the up-and-coming Power Generation certainly gave their fair share. In fact, research shows that seven out of ten members of the Generation X — those men and women now in their 20s and 30s — donate to charities each year.2 (1 "Charity Holds its Own in Tough Times (Giving USA 2003, The Annual Report on Philanthropy for the Year 2002)" American Association of Fundraising Council Trust press release at, June 23, 2003;
2 "Generation X: Facts and Figures," at

However, before you dig deep in support of your favorite cause, make sure your money goes where you intend and is used for the purpose you wish. By following ten smart-money tips, you can help assure that when you give, you're not getting taken.

The vast majority of charitable donations go to reputable organizations that use contributions wisely. Unfortunately, there are also more than a few less-than-trustworthy operators out there.

Here are a few smart-money tips, courtesy of the Better Business Bureau, to help you get the best value from your donation, to make sure it goes to the right cause:("Tips on Charitable Giving,", the BBB Wise Giving Alliance, at

  1. Stick with your favorite charities... those you know or with which you have some affiliation. This is the single most important rule when making sure your donation goes where you want it to go. There are thousands of established, well-managed charities that need your help.
  2. Distinguish between the cause and the charity. Just because you care about the environment and endangered species does not mean you should automatically contribute to the "Whales 'R Us Foundation."
  3. Check out charities that sound good, but... Be especially alert for sound-alike charities that ride on the coattails of bona fide charities. For reports on organizations, contact the National Charities Information Bureau at (212) 929-6300.
  4. Pay by check or exercise extreme care when making a donation by credit card. Never give cash. Also, make out the check to the organization, never to an individual.
  5. Ask if the contribution is deductible for federal income tax purposes. Distinguish between tax deductible for you and tax exempt for them. It's a big difference. Tax exempt only means that the organization does not have to pay taxes. Tax deductible means you can deduct the contribution on your taxes.
  6. When giving used items, you are entitled to deduct their fair market value (not the original purchase price) on your federal income tax form. Since this is a common request, ask for a receipt and, if necessary, help establish a value.
  7. Avoid spending money on purchases and events that benefit fund raisers, not the charity. Ask the solicitor to provide a precise breakdown of (1) how much of the donation/purchase goes to the charity and (2) the amount that is tax-deductible. If the donation involves buying items — such as light bulbs, calendars, candy, etc. — find out how much of the proceeds benefit the charity. Though there are few legal requirements here, depending on your state, the Better Business Bureau standards recommend that at least half of your donation go to programs and that no more than 35% go to fund raising. So, be sure to ask, and then request printed confirmation of the percentages the fund raiser gives you.
  8. Avoid emotional and high pressure appeals... especially if your contribution is "urgently needed today." Take your time to do your homework and make sure this is the cause you want to benefit. The organization will probably not go out of business if you delay two weeks before making your contribution. If it does, you were wise not to contribute in the first place. When in doubt, feel free to say no.
  9. Toss mail appeals that do not clearly identify the charity and describe its programs. Just as important, appeals should not be disguised as bills or invoices. Just because you gave $25 to a charity last year, this does not mean you owe them that much or more this year.
  10. Contact the appropriate consumer protection agency if you have doubts about the integrity of a solicitation or simply want more information about the charity.

If many organizations are competing for your donations: Set up a budget for the total amount you intend to give to charitable causes for the year and divide it into months. For example, if you designate $1,200 for the year, that is $100 per month. Then allocate the cash each month based on the budget. Gradually, you will find yourself focusing on one or two charities you want to help.

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Give to Charity Without Getting Taken

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