It’s the most wonderful time of the year! That’s the line from a popular song played during this holiday season. This is the season in which most tax exempt or non-profit organizations receive more than fifty percent (50%) of their charitable contributions. But with all these individuals, friends, family and organizations soliciting your donations, how do you know who to trust or how to allocate your resources? Here are smart steps to consider before you donate.
- Accountability: It would be wise to investigate whether can you hold the organization accountable to execute the responsibilities associated with your donation. To assist you in making a wise decision you should look up the organization at www.charity.org and www.give.org.
- Avoid Donating Over the Phone: During this season, you may get bombarded with calls from several individuals who claim that they represent an organization. What they are not telling you is that they are employed on behalf of a for-profit organization, soliciting funds on behalf of the non-profit organization. In other words, their company will receive a percentage of your donation as compensation for fund raising services. So, do you want one hundred percent of your contributions to benefit the organization or do you want some to go towards fund raising expenses?
- Tax Exempt: This is a simple question which has significant meaning. You just don’t want to know if the organization to which you are donating, is a non-profit. The real question you need to know is whether the organization is currently tax exempted under the Internal Revenue Service Code and has section 501(c)(3) status. Some organizations were once tax exempted, but may have lost their tax exempt status. To help you figure this out check on the organization at www.irs.gov and click on charities to find out if the organization to which you are about to donate is still legitimate.