How to Choose the Best Charity to Donate To
It’s the time of year when the weather gets colder, people draw closer, and everyone starts to think about how they can support their community. In the realm of personal finance, this season is all about spending – that includes choosing the best charity to donate to.
🎁 According to a WorldVision poll, about 3 in 5 Americans (63%) donate to charity during the last two weeks of December. The last day to qualify for a charitable tax deduction for the upcoming filing is typically December 31st.
🤗 In 2020, Americans donated a record $471 billion to charity, despite mass unemployment from COVID-19. In fact, those making less than $50,000 per year were the income bracket that donated the biggest proportion of their income to charity.
🙋🏽About half of Americans report choosing to donate to a charity because it supports a cause they’re “passionate” about. Another third cite a personal connection to an organization as their main motivator for donating.
Not everyone is in a place financially to be able to cut generous checks to multiple organizations, and that is okay! There are lots of ways to support your community while prioritizing the financial needs of your family. Here’s a Money Under 30 guide to meaningfully giving back without sacrificing cash.
If you are fortunate enough to be able to donate this year, there are steps you can take to feel reassured your money is going to the right place. No matter your situation, CARD made this guide to help you make informed decisions 😘.
Here are a few ways to help you figure out the best charity to donate to this holiday season…
Check in with yourself
Part of feeling secure in a donation or a relationship with an organization is making sure that the cause is important to you.
This may seem obvious, but there are so many options out there today that passion can get lost in the shuffle. Also, in the midst of massive economic and social fallout from COVID-19, it may feel like there are too many worthy causes to choose from.
Donating can feel overwhelming and intimidating. Try to take some time out of the holiday chaos to reflect. Make a list, type a note in your phone, or spend a car ride thinking about what qualities your ideal organization would have.
You could prioritize education, hunger, animal welfare, financial empowerment – there is absolutely no wrong answer. In addition, think about how you want to affect change. Do you want to be an anonymous donor, or do you want to show up and be involved on a regular basis?
If you share financial responsibilities, have a check-in with your partner or family and be open and honest about your priorities. No matter who or what you care about, there is an organization out there that cares too.
Go beyond the Google search
The next question is: How do you find trustworthy organizations that share your passion?
Of course, start with the basics and do a general online search of your important causes. However, it’s best not to rely on Google results alone (remember that just about anyone can buy a web domain…).
Thankfully, just like you can read reviews of hotels on TripAdvisor or companies on TrustPilot, you can read reviews of charitable organizations.
Some of the more-reputable websites that can connect you with reliable non-profits include GiveWell, Charity Navigator, GreatNonprofits, and Guidestar.org. There’s also the Better Business Bureau’s Wise Giving alliance website Give.org.
Once you find an organization that seems well-reviewed and well-established based on third party information, start to look at their website and outreach materials.
Search their website for an annual report or a mission statement. Ask yourself, does it inspire you?
Talk to a real person
Most larger charities have development departments whose whole job is building connections with donors. No matter how much money you’re looking to give, it may be worthwhile to give their office a call. You can even request a tour or a meeting!
Your money matters and taking the extra steps to do your research can make your donation more meaningful for both yourself and the recipient.
Take a data-based approach
Picking your new favorite charity doesn’t have to just be about passion or vibes – you can take a data-based approach.
Unfortunately, with lots of options, comes a lot of variability. Research has shown that some charities are 100 times more cost-effective than others. This means that some organizations can demonstrate better than others that they are making a difference with donor money.
Investigate any and all data that the organization collects, tracks, or provides. In your meeting or phone call, ask them how they measure their progress. A hallmark of an ‘effective’ charity is one that conducts regular self-evaluations and can provide performance metrics.
Go to the organization’s website and visit their “About” page. This is normally where a charity lays out how they expect their programs to have an impact on the problem. This is where you make sure their desired outcomes match up with your expectations.
Look for the facts
Keep an eye out for evidence-based claims – historical evidence, expert opinions, case studies, and peer-review. In general these are green flags you want to see in any materials provided to prospective donors.
If crunching numbers is how you make decisions, you can evaluate similar charities based on cost-effectiveness using their reported data. Here’s a comprehensive guide to DIY comparing charities by the numbers.
Note: When looking through this cost-effectiveness lens, keep in mind that some societal issues are far more complex and difficult than others. Organizations which aren’t able to demonstrate peak cost-effectiveness are still important – we can’t just support charities tackling easy problems!
Donating to charity is one of those processes that seems simple at first glance but has a lot of moving parts under the surface.
To cut through the noise, start by reflecting on causes that are important to you and your family. Next, start your research!
Don’t rely on one source of information alone – even if it’s one of the reputable review sites. Get familiar with the organization in your own way, ask tough questions and use all the info at your disposal.
Finally, ask how your chosen organization defines “success”.
Take advantage of any cost-effectiveness insights, and always try your best to prioritize fact-based evidence over unsupported emotional appeals.
⭐️ From the CARD family to you and yours, happy holidays (and good luck with your research!)