The holidays represent different things for different people, but there’s one seasonal sentiment that’s universally shared: generosity. This can be seen in the annual outpouring of monetary goodwill that transpires as people from all walks of life open their hearts by opening their wallets. Naturally, charitable organizations haven’t overlooked this custom, which is why you’re likely to find your mailbox, inbox and social media feed teeming with donation requests this time of year. However, with so many solicitations coming from all directions, it’s hard to discern where to direct your generosity. We’ve teamed up with Chris Bjorklund, The Savvy Consumer, to provide some advice for giving wisely during the holidays.
Giving from the heart (and head)
Americans are generous people, and statistical research suggests we’re becoming increasingly more so with time. In 2016, charitable contributions in the United States rose to an all-time high of $390 billion, a large portion of which was presumably given during the holiday season. Clearly, generosity is an integral part of our culture and, on a larger scale, our humanity.
However, while it’s good to give from the heart, it’s also important to get your head in the game. The fact is, not all solicitations to give are legitimate, and some so-called charities are actually scams bent on taking advantage of the abundant seasonal goodwill. That’s why giving shouldn’t be a knee-jerk decision; rather, you should fortify your generosity with caution and discernment.
Consider the following tips for being a more cautious giver:
Check out an organization before giving.
There are several charities out there, some well-established and familiar, some younger and less well-known. If you’re thinking about giving to an organization you’ve never heard of, take a few minutes to look it up on a charity watchdog website. A few good resources are Charity Navigator (charitynavigator.org), the Better Business Bureau (give.org) and The American Institute of Philanthropy (charitywatch.org).
Think twice about cash donations.
Whether at the mall or the grocery store, we’re accustomed to being solicited for cash donations while out and about. However, while it’s easy to toss some money into a jar, there’s something about the transaction that lacks accountability. Even if you’re familiar with the organization being represented, you really don’t know who’s handling the money and whether it’s actually getting to the intended recipients. In most cases, you’re better off making a more direct donation online or via mail.
Watch out for copycats.
One common tactic of charity scams is to mimic the name of a familiar organization—for example, The U.S. Cancer Society instead of The American Cancer Society. If a charity’s name seems off to you, verify it before giving.
Click with caution.
With all the charity solicitations via email and social media these days, you have to be extra careful. In addition to fraudulent charity operations, there are phishing scams that seek to lure generous individuals in order to steal their credit card information. By clicking “Donate” at the wrong site, you can inadvertently open yourself to identity theft.
Strategies for giving
Clearly, verifying an organization’s reputability is a crucial first step to giving wisely. However, for those who are especially conscientious, there are ways to maximize the impact of a charitable contribution. Consider the following giving strategies:
Give to an organization that minimizes overhead.
Any charity has overhead, but some may be more prudent with their resources than others. Charity Navigator provides a breakdown of how charities utilize their funds, showing what percentage goes to administration and fundraising costs versus the actual cause. Before giving to a charity, use this resource to see if your gift will be well-utilized.
Consolidate your gift.
One of a charity’s main overhead costs is administration, as every donation has to be properly processed. With this in mind, you can get more “bang” for your buck by giving one lump sum to a single charity rather than making small donations to multiple ones. With less going to administrative services, a higher percentage of your gift will go to the actual cause. Call it cost-effective giving.
See if your employer will match your gift.
In the spirit of the holiday season, some employers will offer to match their employees’ charitable donations. If your employer does this, it can be a great opportunity to double the impact of your gift.
Give to an organization that qualifies for a tax write-off.
This giving strategy may be self-serving, but if tax deductions are a motivator for you, it’s something to consider. Not all charitable organizations qualify for tax write-offs, and sometimes there are limits to how much you can deduct. For example, if you go to a benefit dinner, only part of the ticket cost may be deductible (typically, this will denoted on the ticket itself). By double-checking deductibility, you can make the most of your charitable contributions come tax season.
Maximize the efficacy of non-cash donations.
Not everyone has money to give during the holidays, which is why some choose to instead donate commodities or volunteer their time. However, it’s good to remember that charities often get swamped with donations and volunteers this time of year. For this reason, before showing up, call and see what’s needed to make sure your donation will be useful. Furthermore, consider waiting until the off-season to make your donation, as charities often need more help during times of year when contributions aren’t as plentiful.
A legacy of giving
Besides employing discernment and strategy, it’s worthwhile to reflect on your values when you give. In doing so, you may feel moved to focus on a particular cause you really care about. For example, you may have a heart for the developmentally disabled, be a lover of animals, or have a friend or family member who has been affected by an incurable disease. Donating to a cause that’s meaningful to you can make your gift all the more meaningful. What’s more, your continued generosity toward that cause will become part of your long-term legacy.
All in all, it’s best to be proactive rather than reactive when giving. By giving proportionally from your head and your heart, exercising caution and strategy, and focusing on a cause you’re passionate about, you can maximize the significance of your gift.