Choosing Your Charities Carefully

How do you pick a charity to donate to? Learn the ins and outs, and what to watch out for.

By Navy Federal December 5, 2013

Today's tough economy has been doubly hard on nonprofit organizations that rely on charitable contributions. Many people feeling the pinch have had to cut back on their donations, and because so many are out of work, charities that assist low-income families are being swamped just when their funding has been reduced.

If you're able to make charitable donations, whether cash, material goods, or volunteering your time, make sure the organizations deserve your support.

Here are a few ideas that might help:

Make sure the non-profit organization is well-run. Ideally, it should apply at least 75 percent of contributions to programs that serve beneficiaries, as opposed to salaries, advertising, fund-raising, and other administrative expenses.

Study the organization's website, annual report, and mission statement, and ask for a copy of its IRS Form 990, which details how contributions are spent. Speak to staff members or volunteers, or volunteer there yourself. Or, if you know someone who has used its services, ask for their impressions of the organization's efficiency and client service.

Several online research tools can help:

  • GuideStar ( provides financial summaries and other data on over 1.8 million IRS-qualified, tax-exempt organizations. Its basic search engine is free; you can order more customized research for a fee. The site also features helpful questions to ask and tips for choosing a charity.
  • Charity Navigator ( rates more than 5,500 large charities by financial strength, revenue spent on programs and services, and other criteria. Their "Top Ten" lists and "Tips and Resources" sections provide helpful evaluation tools.
  • The American Institute of Philanthropy ( is a nonprofit charity watchdog and information service whose Charity Rating Guide rates more than 500 major American charities on how they spend donor money.
  • The Better Business Bureau ( rates whether organizations have met its standards of accountability, including ethical conduct and honest solicitation practices.

Take advantage of tax deductions. If you itemize deductions on your federal taxes, you can deduct money and property contributions to qualified tax-exempt organizations, within IRS guidelines. And, although your time spent volunteering isn't tax-deductible, associated mileage and other expenses may be. The IRS' Tax Information for Contributors website ( features a search engine for eligible organizations, information on reporting and substantiating charitable deductions, and other helpful tips.

Guard against fraud. Unfortunately, some unscrupulous people and organizations will take advantage of your desire to help others – if you let them. A few tips:

  • Be suspicious of telemarketing and email solicitations. When in doubt, hang up or delete the email and contact the organization yourself.
  • Be aware that scammers often choose names that are similar to those of legitimate organizations.
  • Never give out personal or credit card information unless you initiate the contact.

A few additional tips:

  • Ask if your employer will match a portion of your contributions and if it allows automatic payroll deductions to charities of your choice.
  • As long as you charge a donation to your credit or debit card by December 31, 2013, it will be eligible for a 2013 tax deduction, even if the charge doesn't clear until next year.
  • Also, a check that you mail to a charity is considered delivered on the date you mail it.

This article is intended to provide general information and shouldn't be considered legal, tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how certain laws apply to your situation and about your individual financial situation.