Before you donate, make sure you’re giving to an org that will do the right thing with your money.
How do I do that?
Start with identifying charities whose mission relates to a cause you care about. Maybe it’s supporting marginalized groups, advancing medical research, reducing homelessness, fighting climate change or helping families dealing with the financial impacts of COVID-19. Search sites like Charity Navigator, CharityWatch, GuideStar, and GiveWell to find your perfect giving match. Then check the nonprofit’s About page to read their plans for making the world a better place.
You can check those same tools to get a better idea of how these orgs use donations. Your dollars will make the greatest impact with places that spend most of their money on the cause itself vs. overhead, fundraising, and big exec salaries.
What else should I pay attention to?
Exact names. Many nonprofits come in pairs. Think: the Sierra Club and the Sierra Club Foundation. Donations to the charity (Sierra Club Foundation) are tax-deductible, while direct gifts to the main organization typically aren’t.
Noted. Talk more about taxes.
If you plan on deducting your donations from your tax bill, make sure the org you give to is registered as a 501(c)(3) nonprofit. (The IRS has a free search tool.) And once you’ve made your donation, keep your receipt somewhere safe until next tax season.
Heads up: you probably can’t deduct any money you gave via crowdfunding sites like GoFundMe and Kickstarter. The IRS labels most contributions on those sites as gifts, not charitable donations.
Anything else I should keep in mind?
Watch out for red flags. The safest way to make a donation is with your credit card on a secure website. Requests for wire transfers, prepaid debit cards, or gift cards probably aren’t legit. And be extra careful about responding to unsolicited calls, texts, or emails for donations.
Giving smarter means knowing your money will be put to good use. Donating to tax-exempt orgs and keeping your receipts can do good for your tax bill, too.