November 9, 2005
By KATHLEEN LYNN
If you're getting ready to donate to charity, as many people do this time of year, Trent Stamp has a gentle reminder:
Look at the small, local charities - the food banks, rape crisis centers and other organizations - that do important work right in your own back yard.
Many of these groups, says Stamp, executive director of Charity Navigator in Mahwah, are "in for a rough winter."
That's because Americans have already given generously in response to Hurricane Katrina and other disasters. And overall charitable giving doesn't change much from year to year, consistently totaling about 2 percent of gross domestic product, Stamp says.
"If people don't have money left at the end of the year because they gave to the Red Cross back in September [after Hurricane Katrina], a lot of needy groups are going to get hurt," says Stamp, whose organization rates charities nationwide.
Half of all individual donations are given between Thanksgiving and New Year's Day, when people are in a generous holiday mood, he says. In addition, the donations figure into year-end financial and tax planning because charitable donations are tax-deductible.
If you'll be giving in the next few weeks, here are a few things to keep in mind:
Or look at charitable annuities. In these vehicles, the donor gives a sum of money to a charity, and gets a charitable deduction. The charity then gives the donor yearly payments, which are partly tax-exempt, for life. After the donor's death, what is left of the original donation goes to the charity. This gives donors (especially older ones) income for life, but still benefits their favorite causes.
That's even more important this year "because you need to make the dollars stretch," Stamp says.
His organization's guideline: Charities should spend no more than 25 percent of their budget on administration and fund raising. Some administrative costs are inevitable, Stamp says - the organization has to pay the staff and maybe even give the volunteers free coffee.
"But I would run screaming from any charity that doesn't spend at least 75 cents on the dollar on charity," he adds.
You can check national charities on charitynavigator.org and on give.org, the Web site of the BBB/Wise Giving Alliance.
Local charities are a little harder to research, but you can find some of their tax filings on guidestar.org.
Stamp also urges you to visit local charities and talk to their leaders and workers. Ask exactly what they do, how they measure their results and what percentage of the budget goes to administrative and fund-raising costs.
If the answers are vague, Stamp says, "find another charity."
Kathleen Lynn's column runs every Wednesday. E-mail: Lynn@northjersey.com.
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