Donating wisely
Being a thriftista doesn’t mean you shouldn’t think of others‚ it just means you want to make sure your money is used as wisely as it can be. So in terms of charitable donations, it can be difficult to decide which charities are wisely using money you donate and which are not thrifty enough!
I won’t make any specific recommendations about who to donate to‚ what matters to you could be different than what matters to me– but I hope the tips below help you find charities that suit your lifestyle.
Administrative expenses: When researching charities, they should only be spending around 10% of their money on administration and fundraising. During tough economic times, that percentage can go up a little as they may not be receiving as many donations as before, but within a year or so, this should be back to around 10% again. Any reputable charity will have an annual report or financial information on their Web site; if they can figure out how to receive online donations, they can figure out how to post this info on their Web site too!
Beware of scams: Some people try to profit from other people’s generosity. A few ways to avoid this is to do a little research. Start by asking the charity to give you a Web site you can look at or to send you something in the mail. Most should be willing to do either. The Chicago Better Business Bureau also suggests being wary of small charities with names that are too similar to well-known charities‚ there was a donation box scam a few years ago where for-profit companies put out donation boxes where the items weren’t actually donated to a charity. Now if all you want is those items out of your house, no big deal. But if you are looking for a tax deduction, beware!
Conducting research: The hardest part of picking a charity is conducting research. We’re busy people and just want to write a check and maybe get a tax deduction. There are actually some very good Web sites out there that evaluate charities, how they spend money, and even help collect money for those charities. So, here are the ones I’m aware of: Charity Navigator, Network for Good, and GuideStar. There are likely others out there, so please share!
Tax deductions: Keep records of what you donate. This shouldn’t be difficult for monetary donations as they will provide a receipt with a dollar amount, but donated goods can be more difficult. Most charities only hand you a blank slip and expect you to fill it in. Don’t be greedy, but keeping a realistic list of what you are giving away. If you are unsure what dollar amount to claim for an item, the Salvation Army has a valuation guide that is helpful. (Good Morning America reported on a Web site called Charity Deductions that also helps value donated goods.) If you normally only drop a few items into a charity box but suddenly get rid of tons of things because you are moving, make a note on those charity receipts indicating that you were moving. If you are audited (please no!), you will at least have a clue why you have a sudden jump in donations in one month.
Here is something I just found…the IRS has a database where people can verify whether or not a charity can receive tax deductible donations.
(Now I’m going to go back on my word about saying who to donate to. If you haven’t thought about donating to microcredits, they are the ultimate thrifty donation! You donate money and your money is loaned to someone in a low economic area. That person is taught how to run a business, loaned money to start it up, and will repay the money that was loaned to him or her. When the money is repaid, it is then re-loaned to someone else. So it is money that keeps on giving! Seems like something a Thriftista would be interested in!
