As the end of the year approaches, many individuals and families are looking to donate to a cause or charity. Unfortunately, there are many charity scams lurking around, waiting to catch someone off guard with photos of cute babies, puppies or promises of a better tomorrow. Some scams only appear to be a legitimate charity while others are legitimate charities that don’t steward their money well. Avoiding charity scams and donating the right way is easy to do with a few simple steps.
Steps to Donate to Charity
Check for Room in Your Budget Before Donating
Don’t donate if you can’t afford it. Is there room in your budget right now? Do you have credit card debt to consolidate or eliminate first? Make sure you are in a healthy financial place before donating. You don’t necessarily need to be debt free; you can carry some healthy debt and still be financially stable enough to donate to a charity.
Pick a Cause for Your Donation
This is the fun part! Select a cause that you care about. There are so many wonderful organizations working to better the world: everything from cancer to animals to education. Maybe you decide to give to the organization you volunteer with regularly. Whatever avenue you decide on, let’s make sure you avoid any possible charity scams when making your donation.
Research Charities and Organizations Involved in Your Cause
There are a few things to keep in mind when researching the charities and organizations involved with the cause you would like to donate to. Keep in mind the following areas while researching:
- History: leadership, beginnings, any turmoil or newsworthy incidents
- Transparency: how they spend, accept and offer tax deductions for donations
- Reputation: what other watch groups and individuals have to say
- Confidence: make sure you agree with their vision, policies and initiatives
Following your instincts is a good way to protect yourself and your donation. If the organization does not offer the information you want, this is probably a red flag. Once your research is complete, you are now in a good place to eliminate any fraudulent organizations and avoid a charity scam.
Benefits of Donating to Charity
Tax Incentives of Donating to Charity
Aside from the wonderful feeling of altruism, there are tax incentives for donating to charity. If you would like to take advantage of a tax deduction, make sure the organization is qualified and you fill out the correct form: a 1040. For the complete list of steps to claim your charitable donation as a tax deduction, read the list here.
Donating to charity is a great way to show fiscal responsibility to yourself and those around you. It’s not only a great way to give back to the community but a tax incentive as well. Remember, don’t donate if it does not reasonably fit within your budget. Not sure about your budget or current financial stability? Talk to a certified counselor from ACCC to discuss your options today.
What organization will you be donating to this year?
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