When you’re thinking about giving this holiday season, don’t forget about the causes that you believe in. Not only can you make a difference by giving to charities, but you can get a tax deduction as well if the donation is made before the end of the year. However, you should do your homework before giving to any nonprofit organization. Here are three things you should consider before pulling out your checkbook.
What does the organization do?
Not only do you want to make sure that you believe in the organization’s mission, but you want to know what the organization stands for. For example, HomeFree-USA’s mission is to help families achieve the dream of homeownership. We do that through homeownership development, foreclosure intervention and financial empowerment. When deciding what organizations you will donate money to, look at their priorities and make sure those priorities are also important to you.
Is the organization legitimate?
Unfortunately there are scammers out there who are looking for ways to get rich off of consumers’ mistakes. It’s not usual for charity scammers to come out at the end of the year, as well as after major tragedies, because they know that’s when people are thinking about making donations. If someone approaches you about making a donation to an organization you’ve never heard of, ask how you can get more information before making a decision. A reputable organization should have a Web site and other methods of communicating to the public what it stands for and how it makes a difference.
Does the organization have non-profit status?
In order to get a tax deduction for donating to an organization, the Internal Revenue Service must have awarded that organization a 501 (c) (3) designation. Just because an organization has a Web site that ends in dot-org does not mean it automatically has that designation. If you donate to an organization without the 501 (c) (3) designation, your donation will not be tax-deductible. To find out whether or not an organization has the designation, visit GuideStar.org, a database of organizations that have been granted non-profit status by the IRS.
It’s a wonderful thing to be able to lend financial support to the causes you believe in. Just remember that the key to financial success is information. Make sure you give using both your heart and your head.