Really bad advice about year-end giving, and some really obvious responses

The Nonprofiteer just received an e-mail entitled “Five Things You Need to Know About Year-end Giving” which was distinguished primarily by the utter wrongness of each and every one of the items identified.  Names have been omitted to protect the guilty, but commentary appears in bold.

1. Background Check….[B]efore you reach for your wallet, take the time to look into how charities spend their money. It is important know how much of your money actually reaches those in need. A rule of thumb is around 7% to 9% for administrative costs, though some online outlets with low overhead structures are able dip below that.  First clue that this is wrong: the imaginary precision of “7% to 9%.”  Second clue: use of the term “overhead” without definition.  “Overhead” includes such profligate expenditures as electricity and health care for employees.  The last thing we need is for donors to make it a condition of their gifts that nonprofit employees live in poverty. Rather than spend time trying to divine a charity’s wastefulness, donors should work on ascertaining its effectiveness.

2. Beware of dogs….Check the IRS database of more than a million charitable organizations to make sure the one you’re giving to is legit. The IRS database will not tell you which organizations are legitimate, only which organizations have filed appropriate paperwork.  Yes, of course, don’t give your credit-card number to any random jerk who calls; but more important, don’t give money to any agency about which you know nothing but a name and a 501(c)(3) designation.

3. Target the Need. If you see a specific need you want to affect, specify where your donation should go by adding a note, writing an email or by designating it on your check…. Money is fungible: whatever you give to a nonprofit inevitably supports its entire range of purposes and activities.  All that happens if you “designate” a spot for your money is that the recipient nonprofit shifts preexisting funds to another program.  If you don’t trust the charity to use your money wisely, don’t give it money; if you do, get out of its way and let professionals do their jobs.  The Red Cross responds to all sorts of disasters; if it gets more money than it needs for the victims of Hurricane Sandy, it will use that money for the victims of Hurricane Tom, or the house fire around the corner from you.  If you object to that, you’re more concerned with being trendy than with helping, so don’t bother to support the Red Cross.

4. Get More Than a Good Feeling….Be sure to get receipts for large donations above $250. Many non-profits are now accepting direct deposits and can accept funds with the click of a button.  Be aware of the tax deductibility of your contribution as not all non-profits can give you a tax-deductible receipt.  It’s true that donations to the NFL or the American Bar Association are not tax-deductible though  those agencies are nonprofit; but gifts to virtually anything you think of as a charity ARE tax-deductible.  Ask about it if you’re concerned but this is the least of your worries.

5. Simplify and Centralize Your Giving. Simplify your giving by using a one-stop-shop that makes finding and giving to charities easier. [Our company’s] users can give to any 501(c)(3) recognized by the IRS. [Our company] keeps a record of donations so you don’t have to and provides a year-end receipt for tax purposes.  Again, don’t be trolling around looking for charities in somebody’s data-base; give money to agencies in your community whose work you know, or to organizations active in the field (social services, the environment, the arts) with which you’re concerned.  It’s no easier to find the names of random charities in some commercial Website’s data-base than directly from the IRS (or from the phone book, for that matter), and if you’re worried about having a receipt you could always just write a check, which is perfectly adequate documentation for the Revenue agents.  Don’t be dazzled by announcements of great on-line services which can direct you to charity: there’s nothing difficult about making your own gift, and “research” in this field means nothing more than familiarity with an agency’s work. What’s being ballyhooed here is the equivalent of an offer to chew your food for you: sure, you could hire someone to do it, but that would eliminate not only all the fun but all the nourishment.

Don’t feel desperate about giving away your money before December 31: there will be plenty of need (and plenty of tax-deductibility) in the new year.  Take the time you need to find out about the mission, services and effectiveness of the organizations you want to support.  There’s no charitable fiscal cliff, so don’t bother searching for a charitable bungee cord; your personal sense of balance will be more than sufficient to support you.

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One Response to “Really bad advice about year-end giving, and some really obvious responses”

  1. Anita Bernstein Says:

    What a relief to be done with December pestering from charities and their hangers-on. Like whoever sent out that terrible advice.

    Can’t find it now but a week ago I idly clicked on a link that said something like “How to support a charity,” pitched at women. Had no idea what it would say. It invited the reader to think about what issue she cares about, if any. Reproductive rights? Health? Hunger? Maybe some very young person benefited (this was NOT a teen or collegiate site), but I was blown away by the inanity. That’s what passed for content about charitable giving last month.

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