• December 21, 2014

Be cautious in year-end gift giving to charities

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Posted: Wednesday, December 28, 2011 12:00 pm

By Mason W. Canales

Killeen Daily Herald

Central Texas residents should stay mindful of the charitable donations they make, especially at the end of the year.

"The time between Thanksgiving and New Year's charities on average see about a one-third or even more of all the donations they see in the year," said Ken Berger, president and CEO of Charity Navigator, a New York-based nonprofit charity evaluator. "The most giving of the year happens on Dec. 31 - 10 percent of all giving happens on that one day."

The last months of the year are busy donation periods because that's typically when people determine their tax deductions, said Berger. But regardless of the tax advantage, people should take care when making charitable gifts.

"The number one that we recommend is to ask questions," said Richard Kitterman, regional director for the Better Business Bureau. "Ask questions until you are comfortable."

Before donating, people should inquire about the finances of nonprofit organizations they are considering.

For example, said Berger, potential donors should see if the nonprofit is accountable and transparent about where the money goes.

Donors also should look for evidence that goes beyond story-telling, such as informational data on the group's performance.

"Don't feel bad about researching the legitimacy of charities, they will understand," said Kitterman.

The Boys and Girls Club of Central Texas, which has three of its five clubs raise significant portions of their funds in the last quarter of the year, expects potential donors to do their research before giving, said Francie Charles, resource development director of the Killeen-based umbrella organization.

"We make it very easy," she said. "We are very strategic about stewarding our donors. We keep them informed on new club sites we have opened and benchmarks we have achieved."

The organization provides copies of annual reports but also directs possible donors to a website where they can review Internal Revenue Service documents from all charities, said Charles.

For donors who want their charitable gifts as tax deductions, Berger said they should always request a receipt. The IRS now requires donations of $250 or more to have documentation.

He added that some nonprofits now have transaction fees, so giving $100 to one organization will go further than giving $20 to five organizations because of those fees.

While generosity is often the cause of charitable giving, potential donors should be wary of those who want to take advantage of their good virtue.

"There are some scammers out there," said Kitterman. "Some people like to get you to think they are good guys."

Popular charitable schemes, such as website donation scams, sound-alike charity names, excessive telemarketing collectors, high-pressured sweepstakes donations and on-street collectors, appear during the peak giving-season, too.

In regard to how these scams operate, Berger said on-the-street collectors may pocket the money, while telemarketing firms may take up to 99 cents of every dollar and website scams might market themselves as nonprofits but only have an .org domain name without any legitimate tax-exempt status.

Contact Mason W. Canales at mcanales@kdhnews.com or (254) 501-7474. Follow him on Twitter at KDHcoveeditor.

Helpful websites

www.charitynavigator.org: Rates charities based on performance standards set by Charity Navigator

www.bbb.org: Rates charities based on complaints from consumers

www.give.org: The Better Business Bureau's website for charities

www.guidestar.com: An information gatherer and publisher of nonprofits

Charitable giving tips

Find a charity with a track record: Experience matters and so does innovation.

Look beyond overhead: Efficiency is an important factor when choosing a charity, but effectiveness is the key question. Once you've identified fiscally responsible charities, look for one that shares regular updates, impact reports, photos and videos of their work.

Ask questions before you give: Most charities raise a big percentage of their donations in the last week of December. Don't feel pressured to write that check until you learn a little more. Visit the charity's website, send an email or call.

See what others are saying: Most charities have Facebook fan pages, Twitter feeds and blogs where the public can leave comments and ask questions. See how responsive the charity is in sharing information and addressing any concerns donors might have.

Watch for scams: The year-end giving season is a popular time for scam artists to try and take advantage of your generosity. Be on your guard for emails that ask for your credit card or other personal information. If you receive a phone call asking for money from a charity you don't know, check its website and the Better Business Bureau before giving.

Source: Larry Probus, chief financial officer of World Vision

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