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.

But, at Charity Navigator, we are fearful that giving will continue to be down this holiday season as it was last year. The recession has hindered American’s ability to support their favorite charities resulting in the biggest drop in charitable giving in the last fifty years. Even if the economy continues to improve, it will likely take many months for charitable giving to rebound. That is bad news for the charities that largely rely on the year-end generosity of donors. 

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:

• Seek out charities with capable leaders that are reasonably paid:  Look for a charity with a passionate, visionary leader who has been in the job for a while. Make sure that leader is reasonably compensated and that the organization has a Compensation Committee that reviews the CEO’s performance and pay. Check out Charity Navigator’s 2009 CEO Compensation Study for salary data and related tips.
• Look for financially strong charities: Use Charity Navigator’s free charity ratings to learn about the financial health of charities that want your support. If your charity is not one of the 5,500 organizations we profile, then use our guide and Form 990 finder or request that Charity Navigator evaluate the charity. 
• Investigate the charity’s outcomes:  Learn about a charity’s accomplishments, goals and challenges by reviewing its website and/or talking with staff. They should be able to tell you about the quality and depth of their results as well as their capacity to continue to get these results, not just the number of activities or people served. This is critical step, after all, the charity’s ability to bring about long lasting and meaningful change in the lives of people and communities should be the key reason for your financial investment.
• Check for evidence of questionable ethical practices: The best charities are transparent and accountable to the public. You should be able to see evidence of this in the information they provide on their web site. The media can also be a good watchdog in this area - providing reports on charities that have been found guilty of a crime or are under investigation - so check Charity Navigator’s News Feed tab for each charity you are considering. Remember that, even if the finances and results look sound, questionable ethical practices can be a warning sign of disaster on the horizon.
• Consider gifts to human services charities: Charities that provide direct services to people in need experienced the largest drop in donations last year. Yet these are the very charities that experience the largest increase in the demand for their services during a recession. If you are passionate about helping the less fortunate in your own community, consider supporting these groups so that they are not forced to cut programs and services. 
• Trust your charity: After you have thoroughly vetted a charity, trust it to spend your gift appropriately. Donors who designate their donations for specific activities hamstring charities and can become a roadblock in the charity’s quest to do good work. Charities need unrestricted gifts so that they have the flexibility to respond to changing demands for their services. 

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