8 Mistakes to Avoid When Donating to Charities
Feeling moved by someone’s story or need and deciding to give of yourself—that’s a beautiful phenomenon. While there’s so much good about this decision to give, there’s so much that can go wrong in it, too. Because donations are the lifeblood of so much good charitable work across the globe, it’s important to find ways to limit common giving mistakes. This way, the best programs for many causes get the best funding and supplies possible. To aid in this mission, here are eight mistakes to avoid when donating to charities.
Always Giving Quickly Out of Emotion
First, you should take some time to reflect on a potential donation rather than rashly giving without a second thought. Quick, unexpected giving often springs from intense emotion, and while emotions can provoke you to great acts of goodwill, donating this way lends itself to making mistakes.
When you give spontaneously because you feel passionate about serving people, you may not appropriately budget as you give, leading to uncomfortable financial difficulties that dissuade future giving. Also, accidentally giving to a scam prevents that money from reaching a different, legitimate cause instead. That said, don’t feel shy about giving when you feel the pull to donate if you know the charity does valuable work in the community.
Most importantly, if you do regret giving out of emotion, don’t beat yourself up too much. Acknowledge your mistake, learn from it, and know that your impulse to give is extremely valuable. Your donations can enact real change in the future through legitimate giving.
Failing to Research a Charity Thoroughly
Similarly, not researching a charity thoroughly enough can lead to inadvertent problems. You should view a donation as an investment and prepare accordingly. Ask the organization questions about past donations and their future goals.
Understanding where they funneled their money in the past will provide insight into the future of your donation. In addition, asking about future goals gives you an idea of where they are going as an organization and how they plan to get there. If they are vague when answering either question, there’s a chance your money won’t go to good use. The best charities have nothing to hide, money-wise, and a specific, actionable plan for their future.
It’s also important to ask about their filing status with the IRS. To receive maximum tax benefits from charitable giving—and to know your charity in question has a solid history of legitimate service—reserve your donations for registered 501(c)(3) non-profits. Each non-profit should be able to produce IRS documentation to prove their claim to 501(c)(3) status. While this designation is not a guarantee that they’re a good partner for you, it makes their legitimacy more likely.
Giving to a Fake in a Crisis
While giving to ineffective or irresponsible organizations is bad, giving to a fake is even worse. Fake charities pop up when there’s a pressing crisis in the world, be it a natural disaster, widespread sickness, human rights issue, or violent conflict or war. As so many people rush to give aid, opportunistic scammers create illegitimate websites and funding campaigns, hoping to lure donors. Often, these fakes pose as well-known charities, adopting organization names and stories that are identical or similar to the original. To avoid these ploys, do your research, but also reach out to organizations you want to donate to directly rather than donating through an email or social media campaign.
Neglecting to Record Your Giving for Taxes
Another mistake to avoid when donating to charities is saying no to a receipt for your records. If your charitable donations push your deductible expenses beyond your standard deduction ($12,400 for single filers and double that for married filing jointly), you may benefit from itemizing your deductions.
While this may sound like an intimidating process, it’s much easier if you have a record of all your donations. With receipts in hand, itemizing involves simply calculating the total value of your donations plus your other deductible expenses (medical expenses, for one) and reporting your total come tax time. You’ll receive more back if your total exceeds your standard deduction, but it’s harder to calculate (and potentially justify to the IRS under audit) if you don’t request donations records.
Giving Things Charities Don’t Ask For
You always want your donation to count. Too often, though, donors drop off tangibles that are useless to the charity. To avoid burdening a charity with items they don’t need, communicate with them beforehand. You can either check their website for an acceptable donation list or give them a call to clarify. They’ll appreciate that you put in the effort to check. Once you hear from them, consider going out of your way to buy what they currently need so they can continue their valuable work.
Only Giving at Year’s End
Due to a combination of year-end tax considerations and holiday sentiment, charitable giving is typically highest in December. While charities experience a boost in this holiday period, they would much prefer regular, dependable, year-round giving. Doing so eliminates some stress around the holidays and allows them to plan for the future from a stable base. In general, resist limiting your donations to every December and, instead, opt for monthly or quarterly giving. Not only does this help the charities, but it also allows you to fit more giving into your year without breaking the bank at one time.
Not Supporting Your Local Organizations
While giving to international or nationwide organizations isn’t a bad thing, you should also consider donating to local charities that few people know about and support. Their work could grow and provide substantial, necessary support to people near you. In the end, donating to local charities helps you take part in building up your city or town in areas you know are deficient.
Giving to Causes You Don’t Care Deeply For
Our final note—don’t donate to charities you aren’t passionate about if there are other causes you care more deeply for. While this may sound extreme, it’s important to channel your energy into programs you feel very attached to so that you do the most good and motivate your generosity. You’re much more likely to give larger amounts more consistently if you’re uniquely attached to a charity. This is much better than half-heartedly giving some money out of obligation or tradition rather than passion.
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