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Three Questions to Ask Before Giving to Charity

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Your money.  Well earned.  Patiently saved.  When you give back through charitable donations this time of year, you do so with the expectation that you’ll be supporting the cause that touched your heart.  Perhaps it will.

Were you aware that third-party solicitors, in some states, can keep 80 to 90 percent of charitable donations for themselves?  A spokesperson for a leading charity watchdog group says you should be prepared to ask a few awkward questions:

1. Where can I see the charity’s financial reports?
 
2. Do you work or volunteer directly for the charity or for a third party?
 
3. Do you, as the solicitor, keep a portion of my donation?  If so, how much?

Meghan Davison is Program Assistant for Charity Watch, formerly known as The American Institute of Philanthropy.  She cautions, “Never give to a charity you know nothing about.”  When she suggested asking for things like IRS reports or other financial data, she explained, “How a group responds can be very telling.”  Whether or not you end up crunching all the numbers yourself, knowing a group is willing to be transparent adds some level of assurance.  Davison suggests avoiding the awkward exchange with a solicitor altogether by giving directly to a charity through its website or mailing a check. She shared the shocking statistic that third-party solicitors can sometimes keep as much as 90 cents out of every dollar.
In contrast, when you give directly, you can often count on two-thirds of the money going to the cause.  “Generally,” explains Davison, “we say that a highly efficient charity is going to be able to spend 75% or more on their charitable programs.”  Exceptions might include a smaller charity that is less popular, such as a group trying to help with a rare disease, when overhead might show up as a higher percentage of the budget.  Larger charities and those led by medical professionals will likely have CEOs with the highest salaries, which should still reflect a proportionate amount of the overall budget.  Davison says it’s appropriate for donors to hold charities accountable by giving direct feedback about your expectations.
Charity Watch  is funded by member contributions in order to remain an independent watchdog group.  It summarizes handy information about most charities year-around. You can request one free sample copy of the Charity Rating Guide & Watchdog Report via email at aipmail@charitywatch.org or by phone at 773-529-2300.
Here are more links to resources from Charity Watch
reducing phone and mail solicitations  http://charitywatch.org/articles/seventips.html.

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