According to the Philanthropy Roundtable, people aged 61 to 75 are more likely to donate to charities. This is likely because they have more savings at this point in their lives and they’re more motivated to help others in their golden years. When it comes to estate planning, charitable giving can provide tax advantages in addition to helping a good cause. To ensure you donate your money to the best and most worthy charities, do your research.
Determine Causes That Are Close To Your Heart
From nonprofits for victims of domestic violence to charities for veterans in need, websites like Charity Navigator can help you develop a short list of charities you want to support with your donation. Charity Navigator provides search tools to help you browse various causes and find information on a specific charity.
“Also note that most states require charities to register with a state charity regulatory agency before soliciting contributions.”
Check The Tax-Exempt Status Of The Charity
To make sure your donations to a charity are tax-deductible, check to see if they hold IRS 501(c)(3) tax-exempt status by using the Tax Exempt Organization Search Tool at IRS.gov. Also, note that most states require charities to register with a state charity regulatory agency before soliciting contributions. To find the agency for your state, go to the National Association of State Charity Officials website.
Check Multiple Sources For Charity Ratings
In addition to the aforementioned Charity Navigator, take advantage of other organizations that rate charities. Sites like Charity Watch and the BBB Wise Giving Alliance use different criteria when rating nonprofits which can help you see the big picture of charitable organizations before you donate.
Once You Have Your Short List, Visit Each Website
To confirm your selected charity aligns with your passion for the cause, visit each organization’s website and research the following:
- The Mission: determine if the charity supports the issue in ways you prefer. For example, you may find out the organization uses donations to lobby the government on the issue of homelessness when you prefer your money be used to provide direct help.
- The Track Record: review the organization’s annual report and look for statistics that show positive outcomes and operating costs. If the website doesn’t provide an annual report, request one.
- What To Look Out For: if a nonprofit claims 100% of donations go toward the cause it’s a huge red flag. Another red flag is stating they only accept cash donations (or cryptocurrency, gift cards, or wire transfers). And if they don’t provide an Employer Identification Number (EIN) on their website, proceed with caution.
For more estate planning tips, connect with an FRC® trained advisor.
