Americans are a generous lot. Collectively, we gave about $373 billion to charity in 2015, according to the National Philanthropic Trust. And this is the time when many people open their wallets because of the holiday spirit and because this is our last chance to donate to a tax-exempt non-profit and get a deduction on our 2016 tax returns.
For some, picking a worthy charity is easy, because of close ties to the organization or its mission. For others, a bit of research is in order. Fortunately, there are online resources that can help.
But first, a word of caution. This is also the time when you’re likely to get the most pitches. If they come by email, make sure that they are legitimate. There are scam artists who claim to represent charities but instead pocket the money or – worse – steal both your money and your personal and financial information so that they can continue to victimize you.
If you get a pitch from what appears to be a legitimate charity, it’s best not to click on any links but type the name of the charity directly into your browser to make sure that you’re not being victimized by a “phishing” scheme directing you to a bogus site. The Federal Trade Commission has a webpage about charity scams.
If you’re not familiar with a charity or if you want to get more information about how it will spend your money, you can look it up on one of the charity validation sites like CharityNavigator.org , GuideStar.org, or CharityWatch.org. These nonprofits provide details such as financial reports and how much the charity spends on programs versus such things as fundraising. In some cases, there will be links to the organization’s IRS-form 990 tax return, which tells a lot about how much money a charity raises and spends. Like most tax returns, there is a lot of minutia, but if you’re interested in how much they pay their top executives and board members, scroll down to section VII. You can usually also find the tax return by entering the organization’s name and 990 into a search engine.
In addition to the charity’s own websites, there are ways to donate through what has become known as “crowd funding.” These include services like Indiegogo, GoFundMe and Fundly, where charities (and others) can make a pitch for general support or specific projects. Crowd sourcing sites don’t necessarily vet the cause and there have been reported cases of scams. Also, they don’t generally require that the organization be a tax-deductible registered charity.
The non-profit Network for Good sells fundraising software to charities but also hosts a donation tool that allows you to search for, research and donate to registered non-profits. Network for Good takes a 3 to 5 percent processing fee to cover administrative costs and credit card transaction fees, but the entire donation is tax-deductible.
Facebook, in partnership with Network for Good, just launched its own expanded charity donation service that enables anyone to start a fundraising campaign or donate to a tax-exempt charity of their choice. Five percent of the donation goes to the cost of fraud prevention, vetting the charity and the credit card fees associated with all transactions, but Facebook assures that it’s a legitimate registered charity. Those wishing to start a campaign or donate can chose among 75,000 charities.
Facebook lets you start a donation campaign by scrolling down to the Fundraisers section on the left column of your home page and selecting Create Fundraiser. From there you can either browse for non-profits or type in the name of one. You can add a photo, give the campaign a title and “tell your story” by explaining why you’re raising the funds. Like Kickstarter and Indiegogo, you can also set a goal amount and optional end date for the campaign. Anyone can raise funds for a non-profit organization, even if you’re not directly affiliated with the group.
Setting up the campaign is just the start. Now you have to convince people to donate by sending invitations to your Facebook friends and posting the campaign on your profile. You can also use a tool to contact people through email or Facebook messenger, even if they’re not Facebook friends.
Facebook posts your goal as well as the amount that has been raised, and the number of donors. Donors get to choose whether to share their name publicly.
Even if a friend is promoting a cause, you should still do your homework to make sure that the charity is not only legitimate but is something you want to support. Though the IRS imposes some limits, tax-exempt non-profits run the gamut from those that give direct aid, to religious organizations to issue-oriented groups that promote a point of view. So, make sure you agree with the group before giving money.
There are also categories of non-profit organizations that are not tax-exempt such as those that devote considerable resources to lobbying or influencing legislation. Such groups may be worthy of your support, but you won’t get a tax deduction for your donation.
Published at Thu, 15 Dec 2016 19:13:02 +0000