Be a Smart Donor

With all of the best intentions to be charitable, we also need to make sure that our money and effort gets to the cause we intend to support. We do not want to have some less than honourable person or organization misleading us, taking our money, and/or mis-using it.  Here are a few tips…

Check out the charity to make sure it is legitimate/real, and not a fraud. Check that it is a registered charity and ask for its financial summary.

http://www.cra-arc.gc.ca/chrts-gvng/lstngs/menu-eng.html

Ask if you will be given an official donation receipt. What is their registered charity number?

Write cheques payable to the charity organization and not to an individual. If you are feeling pressure to pay right away or are offered a tax receipt for more than you are giving then be suspicious. Legitimate fund-raisers are patient and understand there is fraud out there.

Ask what percentage of money goes to overheads and administrationversus going directly to helping the cause.  And ask how your money will be used.

• As a rule of thumb, if the charity’s overheads and admin costs are less than 20% of the funds it raises, it is performing very well.  And if these costs are more than 30% it is less efficient than most charities.

Be cautious of middlemen, such as the people who call in the evenings or go door-to-door collecting for charities.  These people cost money and often take a noteworthy amount of the donation for themselves.  Give directly.

Once you have checked the legitimacy of the charity, concentrate your donations so you can make a difference, and consider your on-going commitment so the charity can count on you each year.

Become proactive.  Be a partner with the selected charities.  Learn more.  See if you can help in other ways.  And do not wait to donate next year.  Include them in your budget and consider including your favorite charities in your will.

Spread the word and be an example to others.

Encourage what you like. We all like encouragement and positive feedback. If you see a homeless person begging on the street corner, you should decide if you think this is right or not.  If you give money, you are encouraging beggars to do more of it.  If you think it is not so right then consider supporting a shelter for the homeless instead.  Your donations help mould the world the way you think it should be.

Check out Imagine Canada’s:  Guide to Giving