CHARITABLE DONATIONS

Check out Give.org. Give.org and similar websites will list different charities and then show you in simple terms how the charity spends its money. You will see how much of donations go to advertising, administrative costs, salaries for paid employees and finally, what percentage of donations go toward the cause that the charity is purported to help.

There is nothing wrong with paying administrative costs and other expenses...many charities exist solely on the money that comes in from private donors so they can't be expected to get away without using some of the money from donations on buying supplies and paying rent on their buildings.

Charities should have a good grasp on how to spend their money, though. If forty percent of all donations to a charity wind up going toward administrative and other costs then that's just too much money, and the people donating are being slightly cheated. After all, when you give a dollar to a charity that helps homeless people, you probably wouldn't imagine that forty cents of it would go to something other than the direct assistance of the homeless.

It is reasonable to expect that charities will have to spend some money on advertising and things of that nature, so you shouldn't expect to see too many charities that use one hundred percent of donations directly to fund the cause, although these types of charities do exist. Figure out what is a reasonable expense ratio to you and then only give to charities that fall within these boundaries.

You should also know that charities are usually required to let the public know about how they spend their money, so if you run across an organization that wants your money but is unwilling to tell you how they plan on spending it then you probably want to pass on donating to that particular group. You may not have the right to tell them how to conduct their business, but you certainly do have a right to know how they intend to use your money.

Some charity drives spell it out for you. If your workplace does a charity drive where you can choose a specific charity from several offerings then you may have easy access to the spending ratio of the organizations. Campaigns such as the CFC (Combined Federal Campaign) give booklets out to employees that feature all the charities asking for money from the campaign, and each charity is required to list not only what they do, but also their cost ratios. Charities that go above the accepted administrative cost ratio of the campaign either aren't accepted into the campaign or instead make a pledge that they will bring these costs down so that more money can go toward the actual cause.

Some campaigns will actually require charitable organizations in this situation to list a plan for brining their costs down so that potential donors can see what is being done to shrink administrative costs. Campaigns like the CFC and other large charitable campaigns draw a lot of money, so charitable organizations will do all they can to be included in the campaigns...even if that means figuring out a way to lower their operating costs.

Can the money be taken easily? Just like tip jars in a coffee shop, sometimes charitable organizations will place a can or other containers near places where people get change and ask for spare money as donations. This is a great way to get money from people who may not otherwise donate on a regular basis, and even though the containers usually only fill up with spare change, they still bring in much-needed money. Before you donate to something like this, however, first be sure that it is a bona fide charity.

Don't drop your change into a can with an amateurish drawing of a child with "Help the Kids" or something equally ambiguous scrawled across the container. If the charity name is not one that you recognize - or if no charity name is mentioned at all - then it may actually be something that someone threw together and will take home for his or her own uses. Yes, there are stiff legal penalties for impersonating a charity, but that doesn't stop some people from still giving it a try.

Additionally, you may run into a situation when an authentic charity has a container like this displayed somewhere, but after a brief look around you realize that it would be all too easy for someone to pick up the container and walk off with it, donations and all. Although you don't want to be a perpetual cynic, it's still important for you to know that the money you are donating is going to the organization that you want it to go to, and not to a crafty person who lifted the container undetected.

If you run into situations like this often at the various places you conduct business, such as the grocery store, the bank, and other places, then maybe instead of plopping your change into these containers you should save your change in a jar at home and when it is filled up you can take it to the bank, convert it to a check, and then send the check on to the charity of your choice. At least then you know that the money is going where you want it to go, and you don't have to worry so much about someone stealing it.