You probably have seen a lot of opportunities to help someone out or give back to your community. These opportunities are usually organized by charities, but most of them you may never hear of.
According to Fortune, Americans gave around $471 billion to charity in 2020. That’s a lot of money. But how can you be sure that the charity is legitimate? There are a few key things to look for:
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1. Do Your Research and Check on Online Charity Vetting Tools
The first step is to always do your research. Don’t just take someone’s word for it that a charity is legitimate. See what other people have said about their experience with the charity.
If you’re looking for a way to research or vet a charity before donating money or time, these sites can be an excellent resource.
Sites like Charity Navigator and GiveWell provide detailed information about the most popular charities in the US and around the world. They also have tools that allow you to track how well a charity is doing over time and whether they follow certain ethical standards.
Charity Navigator is one of the most popular online tools for vetting charities. They provide detailed information on over 8,000 different charities and rate them based on things like overall financial health, transparency, accountability, and more.
BBB Wise Giving Alliance also offers a tool that you can use to vet a charity. Just enter the name of the charity on their website and they will provide you with some basic information about how well it’s doing and what steps to take if you have any concerns.
CharityWatch is another great site that allows you to see how much of your donation will actually go to the people or causes you care about. They also have a list of the top-rated charities so you can see which ones are worth your time and money.
Guidestar.org is another popular site that provides information on over 2.5 million different nonprofits. They also have a database of IRS filings that you can use to research a charity in more depth.
The IRS Nonprofit Charities Database that you can use to research charities is another great way to vet a charity. It provides detailed information about tax-exempt organizations, including financial health and how well they’re meeting their mission.
These are just a few of the many online tools available for researching charities. If you’re looking to donate money or time to a charity, it’s important to take the time to vet them first. Doing your research will help you make sure that you’re donating to a legitimate organization that uses your donations effectively.
You can also refer to America’s Top 100 Charities by Forbes, How to Donate Wisely and Avoid Charity Scams, Before Giving to a Charity.
2. Check Out the Charity’s Website
Once you’ve done some initial research, take a look at the charity’s website. A legitimate charity should have a professional-looking website. It should also have clear information about their mission and what they do with donations.
If a charity doesn’t have a website, that’s a red flag. And if their website is full of typos and errors, that’s another red flag.
3. Ask Where Your Money will Go
Another important thing to look for is how the charity will use your money. A legitimate charity should be able to tell you exactly where your donation will go. They should also have a clear mission statement that you can read on their website or elsewhere.
If a charity is vague about where your money will go or they don’t have a clear mission statement, that’s a red flag. It could mean that they’re not really sure what they’re doing with the money or that they’re not being completely truthful about how they’ll use your donation.
4. Ask About Registration
Another good way to tell if a charity is legitimate is by asking about their registration status. Many states require that charities register and file certain paperwork with the state government. In some cases, this might be a complete list of all of your donations or how much money you’ve raised in a given period.
If the charity you’re interested in can’t provide this registration paperwork, that’s a red flag. It could mean that they’re not legitimate or that they’re not registered in your state.
5. Check for Fraudulent Emails and Calls
One of the easiest ways for scammers to take advantage of people is by pretending to be a legitimate charity. They might send you an email or call you on the phone asking for a donation. These emails and calls can be very convincing, but there are some ways to spot them.
Legitimate charities will never ask you for your credit card or bank account information over the phone or by email. They will also never pressure you to make a donation right away. If you’re even the slightest bit suspicious, it’s best to do some more research before making any donations.
6. Check Their Finances
A legitimate charity should be able to show you their financial statements. These statements can tell you how much money the charity receives, where it went, and how much was spent on things like fundraising.
If a charity is unwilling to show you this information or doesn’t have any financial statements posted online, take that as a red flag. It could mean that they are hiding something concerning from potential donors.
7. Read the Fine Print
When donating to a charity, make sure you look over the fine print. How are they spending your money? Is there any kind of stipulation on who can receive your donation? Are there legal requirements that you have to follow in order to claim a deduction for your donation? If there is anything concerning here, skip out on this charity.
8. Get Receipts
Whenever you make a donation to a legitimate charity, make sure you get a receipt. This is important for two reasons. First, it proves that you made the donation. This can come in handy if you ever need to prove to the IRS that you made a charitable donation. Second, this receipt is tax-deductible.
The amount of your charitable deduction can depend on a few things, including how much money you donate and how often you donate over the course of the year. So make sure to keep all your receipts from charitable donations in order to get the most out of them at tax time.
9. Ask for More Information
If you’re still not sure if a charity is legitimate, don’t be afraid to ask for more information. A legitimate charity should be happy to provide you with more information about their organization. They may even invite you to visit their offices to see first-hand the work they do.
If a charity refuses to provide more information, that could be a sign that they’re not legitimate. They might have something to hide or they simply don’t want people looking too closely at how they operate.
Final Thought
When it comes to giving to charity, it’s important to do your research and make sure that the charity is legitimate. There are a few key things to look for, including how the charity will use your donation, their registration status, and what other people have said about them. Plus vetting tools, you can make sure that your money is going to a good cause.
