Giving Back

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Simple strategies for smart giving

Giving to charity is a noble gesture that can improve the lives of people in need. But making a charitable donation is rarely as simple as writing a check, especially for donors who want to be certain that their contribution is doing as much good as possible.

Giving smart can help donors rest easy knowing their donations went to the right places and will be used to support causes that are near and dear to their hearts. Fortunately, prospective donors can employ several smart giving strategies to ensure their donation dollars are being spent wisely.

• Avoid knee-jerk giving. Many people have to budget their charitable giving. While it would be nice to have unlimited resources at your disposal when donating, such is not the reality for many donors. That means you must give wisely and avoid a knee-jerk donation to the first charity that solicits you. Do your homework before giving, finding a cause that's especially meaningful to you, so when the time comes to make your donation, you feel confident that you made the right choice.

• Be mindful of fraud. Sadly, some criminals prey on the charitable by establishing sound-alike charities or soliciting donations under false pretenses. Before making any donations, confirm that the charity you plan to support is a 501(c)(3) organization if it is based in the United States or a fully registered and recognized charity if it is based in Canada. The Internal Revenue Service (www.irs.gov) can help American donors determine if a charity is legitimate, while Canadian charities must be registered with the Charities Directorate of the Canada Revenue Agency (www.cra-arc.gc.ca).

• Confirm who you're supporting. Many charities have similar names, and it's easy for busy donors to make charitable contributions to the wrong charity that happens to have a name similar to the organization they intended to support. This can be problematic, as you may donate to a charity with a suspect track record of meeting its mission or an entirely fraudulent entity that was established to defraud donors. Before writing a check, confirm that you are supporting the charity you're intending to support and not an organization with a similar name.

• Volunteer before donating. If you have the time, consider volunteering before making a financial contribution. This firsthand experience can provide valuable insight into how well or how poorly a charity is run. Poorly run organizations likely won't make the best use of your money, while those that are run well are more likely to use your contributions to successfully fulfill their missions.

• Resist the temptation to spread the wealth. Some donors are tempted to make several smaller donations to various charities rather than a single substantial donation to a particular organization. While there are many causes worthy of donor support, spreading your donation around to multiple organizations reduces the likelihood that your contribution will bring about considerable change, as each organization has expenses to process donations. When making multiple donations, portions of each will likely be put toward such expenses. But even if a single larger donation has a portion used to pay such expenses, more of your donation will be left over to go toward supporting a good cause.