What to Consider When Making Charitable Donations

Whether you’re looking to spread some goodwill this holiday or to be more charitable in general, consider these five criteria when selecting a nonprofit.

Photo by Jim Franco

Thanks to all the holiday spirit (and, well, the impending end-of-year tax deadline), December is the month when people are the most likely to pull out their checkbooks for charity. (One-third of the entire year’s online donations are made in December, according to Network for Good, a Web-based giving service.) Alas, a hectic holiday schedule may leave you little time to research charities. To help you determine which nonprofit to go with, Real Simple asked leading philanthropic experts to come up with a set of straightforward— and, yes, quick—criteria for separating the best from the rest.

Before You Donate…

Make sure that you understand the charity’s mission. 
On websites and in literature for nonprofits, vague, lofty rhetoric abounds. Groups might pledge to “aid the impoverished nationwide” or “eradicate disease.” And that’s fine, as long as that ambitious language is accompanied by real-world specifics.

“Legitimate charities typically give detailed program descriptions on their websites,” according to Bennett Weiner. That means you should expect to find the following information clearly delineated: how each of the nonprofit’s initiatives is run; what benchmarks have been achieved by those programs in the past; how many people are served by the initiatives; and how a potential client qualifies to receive a service.

If such nitty-gritty information is absent, contact the group’s program manager. She should be able to provide you with those facts and figures. If she can’t, consider it a red flag and donate your money elsewhere.

Verify the group’s nonprofit status. 
You want a charity that has been granted a 501(c)(3) designation by the Internal Revenue Service. Why? This means that the donations that the group receives are used for charitable purposes; that your gifts to the organization are tax-deductible; that the group makes financial information public; and that strict rules govern how much it can spend to lobby the government. It’s simple to determine if a group is a 501(c)(3): Go to GuideStar.org, a nonprofit database, and enter the name. Bear in mind that just because a website ends in .org doesn’t mean that the group is a legitimate nonprofit, says Ken Berger. If the organization isn’t a 501(c)(3), move on, because your donation might not be tax-deductible.