Giving Tips

The holidays are a time of religious and moral reflection that inspire many people to reach out to those who are less fortunate. Less altruistically, but still just as important, donors need to make their end-of-year giving decisions by December 31 to qualify for a tax deduction in this calendar year. As a result, charitable giving swells between Thanksgiving and New Years.

This year, America’s charities are even more dependent on your seasonal generosity. At Charity Navigator we believe that a variety of major economic indicators – tight credit, increased unemployment, falling wages, declines in the stock market, increased foreclosures, weak consumer spending, reduced consumer confidence - are reasons to expect a soft charitable market. 

Therefore we strongly encourage you to give what you can, but to make sure that you are confident in the charities on the receiving end of your generosity. To aid your efforts, we offer the following five tips:

• Get the biggest bang for your buck: With less charitable dollars available this year, it is critical that donations go to charities that will maximize the use of every dollar. Charity Navigator’s research shows that the most efficient charities spend at least 75% of their budgets on programs and services with the remaining 25% spent on administrative and fundraising costs. Donors should focus on supporting charities that can meet this benchmark.
• Marry philanthropy and gift giving: In this slowed economy, many Americans will have less to spend on charity and consumer purchases this year. But they can do double duty with each dollar by engaging in philanthropic shopping. Consumers that buy directly from their favorite, well-run charities, rather than purchasing cause-related products from retailers, make the biggest philanthropic impact.
• Give to charities that help the less fortunate: As the economy continues to weaken, human services charities simultaneously report an increase in the demand for their programs, higher costs associated with providing their services and a decline in donations. If they are to meet the growing needs in their communities, charities like food banks, rescue missions and utility assistance charities need an influx of contributions this holiday season.
•  Choose charities where the CEO is reasonably compensated: Just as Wall Street salaries have come under fire, nonprofit CEO compensation has become a lightning rod issue.  Make sure your charity’s leader isn’t excessively compensated. Charity Navigator’s analysis puts CEO pay around $150,000 or 3% of expenses. Of course, in evaluating the appropriateness of a salary, donors should consider variables such as the charity’s location, size, mission and overall performance.  
  
  
• Donate online: If you want to deduct your charitable contributions on your 2008 tax return, you have until December 31st to make your donations. Online giving at Charity Navigator offers the luxury of waiting until the last minute and the convenience of maintaining your giving records in one place, making your life easier at tax time. Charities also benefit since contributions via the Internet are one of the cheapest ways for nonprofits to receive donations; they are less expensive than both checks by mail and credit card contributions made over the phone.

We wish you nothing but the best in all of your charitable endeavors this holiday season.
Happy Holidays from Charity Navigator!