How to Give Smartly
When giving to charity this holiday season, “you need to use your head as much as your heart,” said Kerri Anne Renzulli in Time.com. With so many causes and organizations vying for your attention, a smart giving strategy will do vastly more good than “quickly dashing off a check.” Sharpen your charitable focus by identifying the causes you care about most. The average American household donated $2,030 to favorite causes last year, according to Giving USA. That may seem like a lot, “but not when it’s divided among a dozen or so nonprofits.” BolderGiving.org, a nonprofit that helps people maximize the effectiveness of their gifts, recommends the 50/30/20 rule. Focus half your giving on one charity, then set aside 30 percent for community gifts, like your church or public library, with the rest for “impulse” gifts such as unplanned donations for disaster relief or a friend’s fundraising drive.
“People waste billions of dollars on inefficient, poorly run, or downright fraudulent charities because they do not bother to research where their money is going,” said Liz Weston in Reuters .com. Before giving, take time to research charities on Guidestar or Charity Navigator to determine how your gift will be spent. If more than 25 percent of donations go to overheads like marketing or administrative costs, “you may want to look for another charity.” Haphazard gifts should also be avoided. Processing costs make it proportionally more expensive for charities to handle small donations, especially those under $25. For example: “If it costs $2 to process a donation, that is just 2 percent of $100 but 20 percent of $10.” But many charities do appreciate monthly payments more than one big year-end gift, because it helps with cash flow.
“Charities are as diverse and wideranging as for-profit businesses,” said Schuyler Velasco in CSMonitor.com. Established heavyweights are better equipped for complex work like disaster relief. They also face more scrutiny from watchdog groups. Small charities can excel at tackling underserved causes and communities and offer the opportunity to see and talk with local leaders, but assessing them is often up to the donor. Charity Navigator, for instance, only evaluates groups with at least $1 mil lion in annual revenue. Try to give what’s actually needed, said Alina Tugend in The New York Times. In most cases, that’s money. Food pantries, for instance, often have arrangements to buy from nonprofit clearinghouses. “If someone donates $50 worth of canned foods, a check for that amount could buy two or three times as much.” Disaster relief agencies especially struggle to manage donations of clothing, food, and medical supplies. “If you want to put your extra clothes to work, sell them at a yard sale and then donate the money to a charity.”
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