Before writing a check to a charity, experts say make sure that the organization is ethically and financially sound.
Photo by Marilyn Campbell.
’Tis the season for giving, and that includes donations to charities. According to a recent survey, charities report that year-end contributions make up nearly 40-percent of annual donations.
“With regard to your tax planning, if you’re in a favorable position and can afford to do so, this is a good time to give to charity,” said Charles W. Miller, associate professor of finance at Marymount University.
Money experts say there are a few things that one should consider before donating to a charity. Potomac resident Glen J. Buco, president, West Financial Services in McLean, Va. says, “Your first thought with regard to charitable gifts is that you need to support charities and groups that you would like to support and the tax deduction should be a secondary factor.”
Steve Pilloff, Ph.D., a professor of finance at George Mason University in Fairfax, Va., encourages potential donors to make sure the charity’s priorities are consistent with one’s philanthropic goals. “Look at the mission of the charity,” he said. “Does it feed hungry people? Does it provide funds for medical research? I am always more comfortable with a charity that I’m familiar with.”
“Your first thought with regard to charitable gifts is that you need to support charities and groups that you would like to support and the tax deduction should be a secondary factor.”
Glen J. Buco, Potomac, Md.
RESEARCH A POTENTIAL CHARITY to learn how one’s donation will be spent. “There are websites where you can go to see how much of every dollar given goes to charity and how much goes to administration,” said Buco. “One more point to note, you need written acknowledgment from the charity for gifts over $250 in order to deduct the donation.”
Make sure the charity of one’s choice has high ethical standards. “Unfortunately, you always read about scams,” he said. “There are charities that are not fully legitimate, but have names that sound similar to established charities to try to confuse people. When someone is going to make a donation they should try to make sure that their money is going to where they think it is going.”
Buco adds, “In the wake of [Hurricane] Sandy, you have to be especially careful of scams. The IRS (Internal Revenue Service) has a website called “[Exempt Organizations] Select Check” where you can look up a charity to see if they are registered with the IRS.”
Consider local charities. “There are a lot of local organizations and groups that really don’t get the funding that they need, so it is nice if you can support local charities,” he said.