par John W. Mitchell
, Senior Correspondent | December 16, 2016
From the December 2016 issue of HealthCare Business News magazine
As the economy continues to improve, more of us will be making charitable donations.
According to the Philanthropy Outlook 2016 & 2017 report, researched and written by the Indiana University Lilly Family School of Philanthropy, compared to 2015, the total giving rate is expected to rise above the five-year, 10-year and 25-year annualized averages through next year. The authors cite this trend as “sustained resilience during recent difficult economic periods.” Contributions from foundations, estates and corporations are expected to grow, while individual giving will be a bit more modest.
What should you look for in a charity? HealthCare Business News asked Kris Kewitsch, executive director of the nonprofit Charities Review Council (CRC) in St. Paul, Minnesota, for her recommendations. Her group works with local and regional charities to make sure these groups meet standards to qualify as trustworthy organizations. Kewitsch offered the following questions that should be answered:
• Is your contribution tax deductible? Just because an organization is labeled “nonprofit,” this does not necessarily mean that the contribution is tax-deductible. While there are a few exceptions, generally only IRS designated 501(c)3 organizations qualified. Also, the charity should make its IRS 990 form readily available to ensure transparency.
• What is the exact name of the charity?
Many organizations have similar sounding names, but may not be the charity to which you intend to donate.
• How does the charity use your contribution?
CRC recommends that at least 70 percent of a charity’s expenses should be used for program service. Make sure fundraising, salary and other operating expenses are reasonable.
• Is the organization registered by federal, state and/or local authorities?
To solicit you for donations, most non-church organizations with a yearly income of $25,000 or greater must file annually with the IRS.
• What is the charity’s mission and does it get results?
Different charities attack the same problem from different angles. For example, three cancer charities may have three very different programs. This could include: making research grants to scientists; publishing pamphlets on a healthy lifestyle; or providing free mammograms to low-income women. What do you want your donation to accomplish? Can the charity offer evidence that it is achieving results and making a difference?
• Where do you want your donation to make a difference?
Find out the geographic area where the charity operates, whether it is local, regional, national or global. And finally, research the charity before you give. Charity scams are not infrequent. In addition to doing a news search, there are charity rating services sites such as CRC, Consumer Reports and Charity Navigator.