5 Steps
To Choosing the Right Charity

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Happy November! ‘Tis the season to be thankful and generous! I say both of those things because we all know that in the U.S., the thankful season tends to turn into the giving season basically overnight. Turkey and Thanksgiving one day; gifts, gifts, gifts, the next. It’s a crazy time of year, I know. But somewhere tucked between Black Friday ads and tinsel on trees, there is a sweeping sense of generosity that kicks into high gear. And I love it. I think it’s why it is named the most wonderful time of the year! Whether it is finding that perfect gift for a loved one, or sending Christmas cards to old friends, neighbors can be seen helping neighbors all around. 

Perhaps you are like me during this time of year and you feel this overwhelming need to give. Understanding that the holiday season can be very rough for some, you are on the hunt for a charitable organization to financially support that will brighten someone’s holiday and provide lasting support even after the giving season is over.

So, how do you take that desire to give and choose the right charity to support? How do you know your dollars will truly make an impact? I have put together 5 easy steps that will help you choose the right charity. 

1. Choose your impact. Where do you want to see your dollars at work? Perhaps you have a heart for the homeless in your city and you want to help a local homeless shelter or a church provide a community dinner each week. Or, maybe you have a global mindset and want to donate to an international organization to combat world hunger or poverty. Where do you think your dollars will be best spent? It’s a big world with a lot of organizations, so starting with a decision as to what country or region you want to see your impact will help narrow the search.

2. Choose your passion. Once you decide where you want to send your dollars, you then get to the fun part — deciding what cause to support. This is super important! Choose a cause that you are passionate about. The charity you choose should make you want to write a check for a million dollars if you could. It should make your heart tug, set fire to your soul, and make you want to shout the good work they are doing from the rooftops. This passion could be brought on by injustice, sadness, or just a plain desire to take action and fill a need within the world. You should not just walk down the street and hand over your donation to the first nonprofit that you see just to check it off your list. Get your heart involved. If you are a Christian, consider praying over the organization you are considering before moving forward. 

Personally, I have a passion for ending human trafficking. I stumbled into this cause kind of by accident years ago, but now that specific cause holds a piece of my heart and I am super passionate about spreading awareness. For this, I support Rapha International every month. I was blessed to have worked on staff there during college, and to this day, I would literally give all of my money to Rapha if I could. I could go on and on, but to save you some reading time, you might as well just head over to their website: www.rapha.org.

3. Check the financials. Fun fact: 501(c)(3) non-profit organizations are required to provide their financials for public viewing. That means you can actually see what the organization is spending their donations on, including salaries! Today, you can easily find this document (called an IRS Form 990) on the organization’s website. Before you start writing a monthly check to an organization, be sure your money is supporting what you intend it to. If the 990 form is intimidating, you can always ask the organization what percentage of funds donated goes to actual programs. Shoot for a high number allocation, such as 80% of every dollar funding its programs and 20% taking care of administration/overhead. Do not be alarmed that 100% of every dollar is not going directly to programs. For organizations to run, people must be paid, and the lights in the office need to stay on. This means that some of your donations will go to support operations. Now, use this tip to your discretion. I probably would not choose a charity where the CEO makes a million dollars a year, but I would support ones that pay fair and comparable wages to employees and has high allocations to actual charity work programs.

Also, consider checking an organization for any accreditation or awards to investigate its transparency and ethical practices. Guidestar.com is a helpful tool for checking an organization’s transparency by pulling together information about the effectiveness of nonprofits based on Form 990s.

Here is a snippet of Rapha International’s program allocation. Look for something similar when checking the financials of your charity.

4. Determine the donation. In personal finance, values are a major component when discussing and setting goals, simply because they determine where and how we spend our money. We would not spend money on things unimportant to us.

We express our values by how we save, spend, invest, and donate our money. This includes how much we decide to spend on charitable giving.

When determining how much of your budget to donate, you should ask yourself, How much of a priority is charity? Is the amount you are considering donating in line with how much your budget allows you to donate? For example, you might say that donating to this cause you’ve chosen is a bigger priority than eating out every Friday. If you look at your budget and you are allocating more funds to eating out than you want to be donating, you might need to tweak your budget categories. 

Another budget item to consider is how frequently you are going to donate. Maybe you decide to donate a set amount every month, once a quarter, or maybe just a special one-time gift to fund a specific need. Whatever it is, be sure to plan for it. I personally donate monthly to the organizations we support, but I also like to do a special one-time gift during the holiday season. This extra expense around the holidays needs to be planned for. So for example, consider that you want to do a one-time gift around the holidays. To make that happen, perhaps you have been saving for Christmas all year and you have $500 to spend in December. You can budget to spend $400 on gifts and then that last $100 on a special one-time gift to your favorite non-profit. 

5. Follow up. The best thing about donating to charities is that you get to watch what your dollars are doing! Follow your nonprofit on social media, subscribe to their mailing list, or just pop in to say hello now and then. Sharing in the successes of their mission that was supported financially by you is such a good feeling. Besides investing, in what other circumstances can you watch your dollars do work once you’ve written the check? Being generous is so fun!

I hope that these steps have helped you choose the right charity for you! Like everything within personal finance, the intentionality behind every dollar is key. I believe that being intentional about choosing which charitable organizations to support is vital in making a lasting impact on your community and the world. 

Do you have a nonprofit you want to shout from the rooftops? Share your favorite organizations below! 

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DISCLAIMER: Although I do have experience in the personal finance field as an Accredited Financial Counselor® professional, I am not a registered financial planner, advisor, or investment agent. Budget Blueprints and any content or resources made available on this site is for informational and entertainment purposes only. I am sharing my personal experience which may not be applicable to others. I am not liable for any losses or damages related to actions or results related to the content in this website. If you need specific financial advice, consult with a licensed professional financial advisor/planner who specializes in your specific need area.