Give Generously But Responsibly: Is Your Charity a Good Steward?

In all of the rush that we all find ourselves in during this time of year, between preparing for gatherings with family and friends and shopping for Christmas, we may also find ourselves under pressure to give to people we don’t know. Before you give to a charity, you not only need to evaluate the cause of the charity but also if that charity is really doing what they¬†claim¬†they are doing with your donations.

Some organizations that claim to be charities are nothing more than scams. These people or organizations try to appeal to our intrinsic desire to help others as a way for them to get donations from people for their own personal use instead of for the cause they claim to support. These are usually the easiest groups to weed out. They may try to present themselves as a legitimate charity, but they will often cannot provide genuine credentials concerning their organization. Agents of this organization may approach you personally, contact you over the phone, or even set up a website for their fake charity.

Some organizations are legitimate charities, but the money that is donated to them may not go where you expect it to go. Where scammers cannot typically provide financial statements, these charities can provide every type of documentation that all legitimate charitable organizations have. However, upon examining their financial statements, you may find that most of the money they receive in donations goes toward administrative expenses and other overhead costs. Very little of the money they receive actually goes toward the stated goal of the charity. Many times a large portion of the funds these organizations raise is spent on maintaining a large organizational infrastructure or on the salaries of individuals like the CEO of the organization.

The best way to tell if a charity is worth giving to is to look for their results. Can they provide tangible evidence of their work? Complete transparency through disclosing financial statements is another way to analyze if a charity is worth your donation. There are also some very good websites that look at the financial statements of various organizations and rate their effectiveness. Charity Navigator is a good website to use in evaluating various charities. Not only do they evaluate the effectiveness of charities, but they also provide plenty of tips on how to chose charities wisely.

We should all be good stewards of our money and not waste what we have. We should expect the same of the organizations that we give to charitably to maximize the benefit to the causes that we want to help.

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