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3 Steps for Smart Charitable Giving
Updated: November 20, 2020 |
Taylor Kovar, CFP

Smart Charitable Giving Starts with Knowing the Facts

Smart charitable giving is not just a holiday “to do” for a list. With natural disasters, local community needs, and a multitude of worthy causes across our world there are opportunities for giving all year long.

We highly encourage giving. But remember–Get before you give. What? Get information before you give it!

Do some research first and know if your money will be put to good use. It won’t take much time and it will ensure your donation is going to a worthy organization. There are often several different organizations working toward a similar end, support the one who is reputable and efficiently using funds.

Consider these 3 steps for smart charitable giving:

1. Text only small amounts.

Should you text a donation? Yes and no.

We think it is great to see technology used for good. Making it easier for someone to give a small donation to a worthy cause the minute they feel compelled to do so is powerful.

Our caution here is: fees often apply. Check out the fine print or do a quick online search before texting the donation number. If your gift is over $25 it is best to donate through their website.

2. Get the facts before you give.

You worked hard for the money you want to share. Take a few more minutes to make sure that money will be put to good use. Get the facts before you give.

Use an online vetting agency for charities like Charity Watch or Charity Navigator.

CharityNavigator.com ranks organizations on their financial health, accountability, and transparency. Over the last fifteen years, they have rated over 9,000 charities and they have over 10 million annual visitors to their site.

If you haven’t decided exactly where to give yet, Charity Navigator has some great top 10 lists:

  • Charities Everyone’s Heard Of
  • Celebrity-related Charities
  • Super-sized Charities
  • Charities Worth Watching
  • Expanding in a Hurry
  • Overpaying for Their For-profit Fundraisers

That last “top 10” highlights one of the reasons we encourage people to get info before you give. That list shows 10 charities that are not living up to their missions. Each charity on that list spends more than 50% of its budget paying for-profit fundraising professionals to solicit donors’ hard-earned money. As a result, very little of the charity’s spending is directed towards its programs and services.

Charity Watch is another great site for a fast check on organizations you are considering. They rate each organization with a letter grade based on their overhead vs. funds applied to the program. The website also shows you the organization’s cost to raise $100. You can quickly check who’s making the grade and avoid those who are failing or barely getting by.

Donate a little bit of your time, by checking out these great websites before you give.

3. Pick a new charity this year.

Most charities rely on the generous donations of repeat givers, so we aren’t suggesting you abandon a cause you support, but it might be fun to add another one to your list. Or maybe your children are ready to find a charity they’d like to donate to.

Charity Navigator makes it easy and fun to find new charities to honor with your funds.

For example, the fastest-growing charity right now is the Toby Keith Foundation. This country’s superstar’s Foundation encourages the health and happiness of pediatric cancer patients and lodging for their families in Oklahoma. (Similar to the Ronald McDonald House charities.) So the country music fan in your household might enjoy giving to his benevolent efforts.

The next fastest-growing charity listed is The Fred Rogers Company. Yes, neighbor, THE Mister Rogers. He started a non-profit in 1971, but this group is honoring Mr. Rogers “…building on Fred’s legacy in innovative ways through a wide variety of media, and engaging new generations of children and families with his timeless wisdom. They appear to be a very good neighbor using almost 95% of every dollar for program expenses, continuing his mission to care for the social and emotional well being of children.

We share those two foundations to inspire you to take another look at the variety of groups doing good who need your help.

It isn’t our intention to tell you where to give, as it’s such a personal choice; we just encourage you to do it! And be wise with your hard-earned money.

Remember to take the time to educate yourself before giving:

1. Be proactive
2. Do your research
3. Consider one-time or regular giving possibilities
4. Follow up

There are lots of people who need your help. And lots of ways to research before you give. Please do both.

Taylor and Megan Kovar

The Money Couple

Taylor and Megan Kovar, The Money Couple

For more tips on giving, as well as other money topics, follow us on Pinterest, Twitter, and Facebook. And be sure to take our FREE Money Personality Assessment to learn how you can work on money shortfalls!


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