5 Questions to Ask Before Donating to Charity

These days, it has never been easier to financial support a charitable cause or organization. Whether it’s a “text-to-give” campaign or clicking a “Donate Now” button, we can contribute in a variety of ways on our own terms. However, just because it’s easier to make a difference, it’s still important to be diligent about who gets our dollars.

Think of your donation as an investment. Just as you wouldn’t make any investment without a little research, the same principle should hold true when you are talking about donating money to charity.

If you have decided that giving money is the best way for you to make an impact, here are five questions to ask before donating to charity.

What is the status of this organization?

Is the charity a 501(c)3 organization? This means that the charity or foundation has a federal tax exempt status. Note that there are many great nonprofit organizations that do great work without this designation, but you want to be clear about that up front. One main reason is so you have a sense of whether your gift is tax-deductible or not.

What is the reputation of this organization?

Think about what you know about this organization. Is it generally positive or negative? You can evaluate nonprofits on websites like Charity Navigator. Other ways to look into this are Facebook and internet searches. I always look at organization social media pages to see what people are saying about the charity. If it’s positive, then I usually feel better about my contribution.

How will my donation be used?

While you may not get a penny-by-penny report of how your donation is being used, you should have a general sense of the generated impact. Is this organization using funds to feed families in need or will your gift fund advocacy work? You need to be comfortable with whatever the answer is.

Will your employer match your donation?

A quick scan of your benefits will let you know if your company matches charitable gifts up to a certain amount. Note that most companies generally require that the recipient organization have a 501(c)3 standing, which reaffirms the importance of question #1. Make sure that you confirm with your HR department any needed documentation or organization requirements.

Is there an option to set up a recurring gift?

Currently, I have four recurring donations set up and they make my life so much better. If you want to regularly support a nonprofit, ask if there’s an option to set up a recurring donation. Even if they don’t, you may be able to set up an automatic payment from your bank to that organization in the form of a check via mail. Set it and keep it moving!

Committing your money to an organization is a great opportunity to fund change. So, I commend you for making that decision. Now, let’s just do it right.