Donating to Charity the Smart Way

Before breaking out your checkbook and signing your savings over to an anonymous charity fund, use a little common sense and do some investigating. According to the Federal Trade Commission, the best thing you can do is give to an organization that you are familiar with. For example, choose to give to:

• Your company's charitable foundation
• The local chapter of the Red Cross or
• Some other organization with a mission and management team you can trust.

Beware that familiar groups may not sponsor funds with similar names. For instance, a fund called The Red Cross Trust For Freedom and Peace may not be affiliated with the Red Cross.

Research Before You Give

If you're not sure about a charity, check it out before sending money. To research potential charities, contact:

• Your local Better Business Bureau
• The charity registration office in your city
• The Better Business Bureau's Wise Giving Alliance
• The Internal Revenue Service for information on tax exempt organizations

If you're interested in donating directly online, you can locate various charities through the American Liberty Partnership's website.

Phone Solicitations

Take the same cautious approach when someone calls you on the phone.

You'll probably want to give your donation directly to the organization, because solicitors cost money - money that doesn't go to the victims or their families.

If you do donate over the phone, give absolutely no personal or financial information. If someone asks you for details, such as your social security number or bank account information, hang up and contact the organization directly to report this incident. The last thing you want is to give to a charity and have your identity stolen in the process.

If someone claiming to be from the police or fire department calls you, keep in mind that even if the soliciting group claims to have ties to your community, there is no guarantee that your money will be used locally or even for neighborhood safety programs.

Don't be tempted by promises of special treatment for donating - you're still getting that ticket for speeding whether you donate or not. Although there are many noble causes sponsored by police and fire departments, no solicitor should make you feel pressured into donating. Ironically, any one who does should be reported to the authorities.

Ask questions and demand answers. Request written information about the charity and how it will use your money.

In the end, make your check (no cash, of course) payable to the formal name of the charity.

Tax Deductibility

An important issue to bear in mind, particularly at year-end, is whether your gift is tax deductible. A gift to a tax-exempt group (one that does not have to pay taxes) may not be deductible from your federal income tax return. Therefore, you inquire as to whether the organization that you want to give to is tax-exempt and whether a gift is deductible. Always ask for a receipt indicating the amount of your contribution and noting that it is deductible.

Remember - giving a gift to charity is worthy but making sure that your gift is used for those in need is priceless.

Question For Your Attorney

• I keep getting phone calls from a particular charity. I don't want to give a donation and have told them, but they keep calling. What should I do?
• I gave a donation to a tax-exempt group, how does this affect my tax return?

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