Between the ubiquitous bell-ringing volunteers outside grocery stores and the posh fundraisers trying to take advantage of fourth-quarter generosity, there is no lack of opportunity for giving to charity during the holiday season. But not all charities are equally deserving of your hard-earned dollars—and some scammers try to get your money by posing as a charitable organization.
We spoke to Jamie Truman, cofounder of Truman Charities, to find out what you need to know to make sure your money does the most good possible.
Check the Financials
Truman recommends taking a look at a charity’s financial statements before opening your wallet. You want to know how much of your donation will actually go to the charitable work versus how much will be used on overhead.
“The last thing you want is give to an organization where 90 cents to a dollar is going to admin costs,” Truman says. And there are several ways to find this information. First, Truman recommends looking directly on the organization’s website. “It should be extremely cut-and-dry on all their financial statements,” she says. Typically, you can find the information on a tab labeled “Finances” or “Annual Report.”
Alternatively, you could go to a third-party charity-watchdog organization, such as Charity Navigator or the Better Business Bureau’s Wise Giving Alliance. These types of organizations rate charities by their effectiveness, impact, and finances and make it easy for the average person to understand how their money is likely to be spent.
Beware Emotional Appeals
Avoiding emotional appeals for money may seem like an oxymoron since charitable giving is emotional. (Remember the ASPCA commercial with heart-wrenching images of abused dogs and cats and the Sarah McLachlan soundtrack?) And there’s nothing wrong with a charity appealing to your heart. It’s a perfectly reasonable way to encourage donors to give generously. (In fact, that commercial was the most successful fundraiser ever for the ASPCA, first airing in 2007 and having raised upwards of $30 million in its first two years.)
One difference to note is that legitimate charities recognize that giving can and should be a long-term relationship, while scammers are out to get what they can immediately by getting you to give impulsively.
“A lot of scammers will definitely work on people’s emotions,” Truman says. “So if there’s a national disaster, people want to give and they want to help—and scammers take advantage of that.”
It’s understandable that you may feel for the people you want to help. But it’s important to find the best way to help them, rather than do something because your heartstrings were pulled in the moment, and you’ve been given an “easy” way to help.
In particular, Truman cautions against the text message donation. “A lot of times, those are scammers,” she says. “To make it seem legitimate, they’ll have a name that’s very close to a national name that you would know.”
Just Say No to Pressure
And what about those transactions online asking you round up your donation to the nearest dollar (or five) or a hard sell from a volunteer going door to door? Donation-shaming is a low tactic, and Truman wants you to know that you can and should refuse to donate under that kind of pressure.
“[Charities] that are doing it for the right reasons do not push,” Truman says. “They’re not salesy.”
Instead, legitimate charities will have an open approach in which they let you know how they’re helping their cause or the community—so that it resonates with you. They’re not going to push, pressure, or put time constraints on your giving.
Never Give Cash
It can feel good to hand over cash to a volunteer, but Truman warns against it. You generally can’t request a receipt when you give cash, and there’s no way of knowing where your money is, in fact, going.
“Unless you’re actually at an event [sponsored by a specific organization], just never give cash—because then there is no record,” Truman says.
If you are inclined to donate to a charity that solicits cash donations, you would probably be better off looking up their website and donating directly through that. That provides a “paper trail,” so to speak, so there’s far less risk of your donation going missing.
Help Your Local Community
There are certainly times when you want to help people who are hurting on the other side of the world—or the country. But when it comes to regular donations, you may want to look to small, local charities rather than national or international organizations.
“Your dollar is going to stretch a lot further with a local charity that is working in your backyard,” Truman explains. “Local charities are more likely to be 100% volunteer-driven.” Meaning, any dollar you give to local charitable organizations will help more people and do more good than the same dollar amount given to a massive charity.
Give Generously—and Intelligently
Charitable giving is a wonderful way to share the goodness in your life with others. But every charitable appeal is not worth your generosity.
The best way to help is by taking the time to vet the charities you want to donate to. Then you can be sure the money you give will actually get to those who need it.
This article was written by Emily Guy Birken from Fast Company and was legally licensed through the DiveMarketplace by Industry Dive. Please direct all licensing questions to legal@industrydive.com.
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