To do good well, you need to identify and support strong charities doing solid work. You need to avoid the wasters and fakers. We’ve identified Five Habits of Savvy Donors to help you do both.
Habit 1 – First check the group’s identity
Not every group that looks, sounds or feels like a charity is truly a charity. Scam “charities” often adopt names similar to legitimate charities, siphoning off dollars needed for good works. Scam “charities” do double damage – they steal from you, and they steal from those you want to help.
Know how to quickly check a group’s identity.
Habit 2 – Recognize that it’s up to donors to evaluate charities
Most charities must register with the IRS and file annual information returns on Form 990. But the IRS is not set up to evaluate or monitor charities.
The best known evaluation services rate only about 11% of charities.
Know about charity evaluators and how to evaluate charities yourself.
Habit 3 – Keep track of your giving
Keeping an inventory of your giving is a great way to focus and monitor your donations. It’s a great way to review your giving results. And it’s also helpful at tax time.
Know how to keep a giving inventory.
Habit 4 – Budget your giving annually
Budgets bring big benefits. Setting a charitable giving budget makes you think about what portion of your current income and/or net worth you are comfortable donating to charity.
Also consider “social” giving and sharing giving decisions with others.
Know how to budget your giving. And compare your actual giving to your budget.
Habit 5 – Give to fewer charities
This might come as a shock: Fewer is better. When you give to fewer charities, you can focus. Your research can be more thorough and more of your giving can have program impact.
Know the value of giving to fewer charities.
When you follow the habits of a Savvy Donor you’ll
- continue to make a difference in the world
- protect your generosity from wasters and fakers
- support strong charities doing solid work
- give wisely and well
- and save time and worry while doing it.