Charitable giving can give you a warm glow. In addition to leaving bequests, often in the form of trusts, to carefully chosen organizations, agencies, and/or educational, religious, or cultural institutions, most people give smaller amounts throughout their lifetimes. When you are working with a well-respected charitable planning attorney, you can be certain the charities you support will be vetted by your legal representative. More than that, you can be sure that your donations are being made in the most cost-effective manner relative to your tax base.
On the other hand, when you dole out lesser amounts to causes that appeal to you at a vulnerable moment, you may be wasting your money on a misrepresented charity or even contributing to a criminal enterprise.
How To Protect Your Assets and Not Be Duped
You may respond to a plea for funds in the mail or over the internet; buy a cake at a church bazaar or an antique at a hospital auction, or place a few bills in a jar or kettle at Christmas time. The impulse is a positive one. Just make sure that the funds you contribute are going to the right place. The following are a number of ways to make sure your generous impulses are not misguided.
Check Out the Organization with Reliable Agencies
There are a number of legitimate agencies you can contact to check the status of the charity in question:
- The Exempt Organizations Select Check Tool of the IRS Nonprofit Charities Database which will let you know if the charity is really 501(c)(3) tax exempt
- Charity Navigator rates charities based on their accountability and transparency
- GuideStar reveals information about how organizations spend their donations and the earnings of their top officers
- Charity Watch not only rates charities according to specific criteria but exposes abuse when it occurs
- BBB Wise Giving Alliance rates charities on 20 standards — stick to charities that are rated 20 out of 20
Use Common Sense
Just because you feel warm and fuzzy doesn’t mean you aren’t being taken advantage of. Pay attention to the following caveats:
- Giving a donation to a charity you’ve never heard of is risky at best. Be aware that many fake charities use names closely resembling the names of legitimate charities or similar symbols or insignias. Check names and symbols carefully.
- Don’t be lured into supporting a charity just because you’ve received a letter, phone call, email or text. Choose the charity you want to donate to; don’t just respond because you’ve been targeted.
- The charity you give to must have real, verifiable, contact information.
- If the charity is legitimate your donation should be tax-deductible.
- Find out what percentage of your donation actually goes to the cause after expenses by asking for financial statements.
- If you are suspicious of a particular solicitation, check with your police department to see if complaints about the organization have been made.
- Keep records of donations in case questions arise later.
- Remember that technological advances have made identities much easier to fake. Letterheads, return phone numbers and even websites are all too easy to fabricate.
- If you receive “gifts” by mail, it doesn’t obligate you to donate to the sender.
- Don’t be embarrassed to ask to see credentials when someone comes to your door or solicits you on a street corner.
Approach Charitable Giving with the Seriousness It Deserves
You know how much time and care your charitable giving attorney takes to make sure your charitable giving is meaningful and beneficial to those you desire to help. Don’t undercut the process by being cavalier about your less substantial or more spontaneous donations. You want to be generous, not foolish.