In the aftermath of the hurricanes Maria, Irma, and Harvey and the earthquakes in Mexico, many people want to help by making donations. But figuring out how to give can be tricky.
You're likely to hear about charities in the news or on crowdfunding sites including GoFundMe.com and JustGiving. But in some cases, it's hard to know whether a fundraising campaign is legitimate or whether the funds you donate will be used in the way you expect.
"The danger is that you'll give to a group that doesn't know what it's doing," says Daniel Borochoff, president of CharityWatch, a charity watchdog. It's a better idea, he says, to donate to an organization that you know is in a position to help.
Make Your Donation Go Further
To improve the chances your donation will be put to the best use, follow these tips.
Research how your donation will be spent. Following a disaster, the three charity watchdogs, the BBB Wise Giving Alliance, Charity Navigator, and CharityWatch, often publish lists of highly rated groups active in a particular emergency and likely to use donations wisely. Most of these lists focus on major national charities, but you also might find some local charities.
The watchdogs evaluate charities based on many factors, including how much donated money is directly used for their charitable programs as opposed to covering the costs of fundraising and general expenses.
Keep in mind that some charities—even those that are highly rated—might not currently be in a position to provide aid. Instead, they might be collecting money to distribute to other groups, says Bennett Weiner, chief operating officer of the BBB Wise Giving Alliance. So you may want to check with the charity.
You can also do your own analysis by reviewing a charity's annual report and federal tax form 990, which most charities are required to file with the IRS. This information should be available on the charity's website as well as from Guidestar, a online group that provides information on charities.
Be cautious about giving to individuals. It might be tempting to give to a fund set up to help an individual or family on a crowd-funding website. But it's difficult to determine whether those beneficiaries are the most needy or whether the money will be used for the stated purpose, Borochoff says. "Unless you know the people personally," he cautions, "it's better to give to the charities."
Also, aid to individuals isn't tax deductible, Weiner points out. The best way to donate on behalf of an individual or family, he says, is through a fund administered by a third party, such as a bank, lawyer, or certified public accountant.
Be wary of appeals for money. Letters asking you to help with fundraising that appear in your mailbox or that come by e-mail, phone call, or text could be fraudulent, Weiner warns. Scammers are increasingly using social media posts to lure people to give, he says. Some direct people to phony charity websites that appear to be authentic.
Give cash. Donations such as food, clothing, and bottled water can be difficult and costly to transport, Borochoff says. If you donate money, charities can decide which items are most needed and most easily transported. Never donate goods unless you've checked with the charity first, he adds.
Avoid giving money to professional fundraisers. Many charities use professional fundraising firms to generate donations, but those firms take a significant portion of every dollar donated.
In 2016 professional fundraisers kept nearly 35 percent of the more than $379 million they raised on behalf of national and local charities in New York State, according to the most recent professional fund-raising report (pdf) by the New York state attorney general.
In more than half of the 1,143 fundraising campaigns, the charities received less than 50 percent of every dollar donated. In more than 36 percent of the campaigns, the nonprofits got less than 30 percent of every dollar donated.
Give over a period of time. While donations often are made immediately after an emergency, those affected often continue to need help months or even years later. "Many organizations see a drastic influx of resources in the aftermath of a disaster that begins to taper off in a few weeks," according to Charity Navigator.
Giving over the long term and to groups that are providing more than just immediate disaster relief can be helpful.
