One of the great parts about being out of debt is the ability to give more money away. Giving to others and to organizations that help others is a joy. How does your charity of choice compare to the rest of the pack?
When giving to a new organization, it is a good idea to do your homework before writing the check. Did you know that 6% of donations to churches are embezzled or lost to fraud?
Below are a few ways to make sure the organization aligns with your values and spends your money wisely.
IRS Exempt Organizations Select Check
There are many reasons to give beyond receiving a tax deduction, but it is wise to take any tax advantages the government offers.
The IRS has a new tool for checking the exemption status of non-profit organizations (501C3) to ensure you are able to write off your giving on taxes (assuming you are able to itemize your taxes). This tool improves upon their electronic publication 78 search.
The IRS EO Select Tool allows you to see if an organization (source):
- Is eligible to receive tax deductible contributions.
- Has filled out a 990-N form. (if gross receipts are $50,000 or less)
- Has had tax exemption status revoked due to not filling 990-N for 3 years.
The IRS Exempt Organizations Select Check tool allows you to search by EIN or name of organization + location.
If you are searching by name, it is listed by their official Does Business As (DBA). Below is an example search for “Church” in Los Angeles. Use the “Description Status” on the right side to determine exemption eligibility.
If your organization isn’t listed, then please make them aware and inquire further as to why or ask if they will release their EIN or DBA to search the database again.
Not being listed could be a red flag you are being scammed or that the non-profit isn’t yet organized.
Charity Navigator is probably the largest Non-Profit evaluator. The free feature allos There is a feature where you can sign in for access to more information on your charities: 3 years of historical data, comparison feature, and more.
They have some cool top 10 lists also.
Charity Navigator Video
Before making a large donation to a nonprofit or begin regular giving, it is advised to do your homework first using the above tools and others available on the internet.
Do you check your charities before you give? Use the tools above to grade the non-profits or charities that you give to.
Photo Credit TheBusyBrain (Creative Commons)