Getting The Most For Your Charitable Donation

January 18, 2010 at 12:59 am Chad Upton 1 comment

By Chad Upton | Editor

With the recent disaster in Haiti, I have been thinking a lot about charitable donations. My wife and I wanted to make a donation, but had no idea where to start. We wanted our donation to provide as much aid as possible by giving to a trustworthy charity with minimal administration costs and decent buying power. Our questions was: which charity meets our standards and how much should we give?

I have done some research, learned some secrets and wanted to pass them along. This should be helpful for making any type of charitable donation, not just Haiti relief.

Give Cash

It might be tempting to buy blankets for a homeless shelter or give food to a food bank, but it’s actually better to give cash. Firstly, you don’t know what that charity needs most. The homeless shelter may have more than enough blankets, but not enough soap. If you give cash, they can buy what they actually need. Of course, if you already have a stack of blankets, call first to see if they can use them or if you should hang on to them for a later donation.

Secondly, your buying power is minimal. If you brought $50 worth of food to the food bank, they’d be very grateful. But, if you gave them $50, they combine that with their other cash donations to get a bulk discount and get more food with your $50 than you can.

Texting Is Actually a Slow Way to Donate

While it is extremely fast for you to initiate a donation by texting from your mobile phone, it can take 2 – 3 months for that money to get to the Charity. From the time you send the text to the time you pay your bill, 30-45 days may pass. That’s the first delay, the second delay is your mobile carrier. According mgive.com, the mobile giving foundation, carriers release donation money to mgive every 60-90 days. Then mgive takes 10% (processing fee) and distributes the money to the charities. Most of the charities take donations at their website, this is the fastest way to turn your money into help and cut out the middle man.

Know What You’re Buying

If you can’t decide how much to give, it may help to understand what your money can buy. Here are some of examples of what a donation to Unicef can get.

$67.79 – Water purification tablets, cleans 50,000 liters of water
$232.86 – School in a box, enough school supplies for 80 children
$500 – Water pump, provides clean water for an entire community
$1,994.77 – Maternity kit, enough supplies to safely deliver 50 babies

In other words, you’re not giving $68, you’re giving 50,000 liters of clean water.

Donate To a Reputable Charity

There are some great websites to help you find a charity that provides the help you want to give. These sites also rank the charities and provide transparency by including information such as charitable institution’s financial statements. Here are some sites, and what I like most about each one:

Charity Navigator – Helpful ranking of charities. Good list of Haiti charities and their ranking.
Network for Good – Quick links for some of the most popular charities.
Just Give – Great search engine for finding a charity in your own community, also has a wedding registry for charitable donations.

You Don’t Need Money To Donate

Many local charities can use your time. Use Just Give to find a charity in your community.

The Largest Charities Are Not Always The Highest Rated

The largest charities usually do the best job of raising awareness, but that often means less of your money actually goes to the cause itself. That’s not necessarily a bad thing, awareness is a very important part of fund raising, and many charities allow you to designate your gift. This is ideal if you want to ensure your money is used for aid rather than further fund raising.

Click here for a list of some of the highest rated charities you can donate to, all of these are rather large charities but few of them are charities you usually hear about. Click here for a list of the charities participating in Haiti relief (4 star charities are at the top).

Privacy

Using some of the sites I mentioned above, you can ensure your charity of choice has a written privacy policy that will protect your information. It is especially important that your information is not sold to other charities — they know you’ve given before and your phone will be ringing off the hook.

Avoid scams

The FBI recently released some tips to avoid charity scams. It is very important that you don’t reply to or click on links in any spam email. Donate directly to the charity when possible, not through third parties. Verify the legitimacy of the charity with one of the sites I mentioned above. The rest is common sense, but you can read the entire list by clicking here.

Tax Benefits

One of the best parts about giving is the tax benefit. Most donations are tax deductible and many people also take advantage of a free efile, further adding to their refund. For a few countries, I have provided links to better understand the tax benefits and implications of giving to charities: USA, Canada, UK

Giving to a charity that you believe in can be one of the most rewarding things you do, for you and the people that you help.

Broken Secrets

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Photos: Zoriah, DVIDSHUB (creative commons)

Sources: Charity Navigator, Just Give, Network for Good, mgive, school in a box, Unicef Health, Unicef Water,