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Plan Well, Retire Well

Saving and investing your money

Tips for Choosing a Charitable Organization

In the wake of natural disasters such as the earthquake that hit Haiti last week, charitable giving is up. With so many organizations claiming to collect for relief efforts, how do you know whom to give your monies to? Through research, I found that there are a few key factors that might help you choose which efforts to support and which to stay away from. Here are a few points to consider when choosing a charity:

1. Find out the percentage of your donation that actually goes towards supporting victims. As a rule of thumb, reputable organizations will use most of your donation to aid victims or provide programs. If most of your donation goes toward administrative costs, the organization is probably one you would want to shy away from.

2. Steer clear of organizations that seem to appear overnight. Organizations which have been around for years and have recognizable names and reputations for helping are probably safer alternatives.

3. Look at the organization's Form 990. This IRS form is filed by organizations exempt from taxation. In addition, it provides financial information on how much the organization spent on administrative, program and fundraising costs.

4. Make sure the charity is legitimate. Don't be fooled by a charity having a similar name to one that you may have heard before. There are watchdog groups that track charitable organizations. Visit their websites to look up the charity you are considering. See the list below.

5. Give your time in lieu of money. If you want to learn more about a charity, volunteer some of your time. Firsthand experience with an organization allows you to get a better feel for who they are and what they do.

6. Avoid identity theft. Never give your credit card or personal information in response to phone, email or door-to-door solicitation. If you would like to give to an organization, visit their website for online giving or write a check. Never give cash.

For those that itemize, the IRS has made your charitable donations to support Haiti relief efforts immediately deductible on your tax return. For more information on this deduction, visit the IRS website.

If you would like to check out a charitable organization, visit one or more of these websites:

BBB Wise Giving Alliance

Charity Navigator

American Institute of Philanthropy


Until we talk again, have a happy new year.

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