Evaluating Your Charitable Gift

When you make a donation to a charitable organization that is important to you, your commitment to the cause doesn't end when you sign the check. If you give to a cause that you are passionate about, you want to know that your contribution is being used effectively and efficiently, especially if you may donate again.

Consider Your Contribution

It's not always easy to evaluate the impact of every donation. Larger gifts that are restricted are often easier to evaluate than others, simply because you can often see the results.

"If you are in a position to make large donations to charity, it is easier to put restrictions on how the funds may be used by the charity and track the results," says Laurie Styron, an analyst for the American Institute of Philanthropy (AIP). "For example, if you donate $20,000 to a school and restrict the donation to be used for refurbishment of its playground, it will not be difficult track the progress with your own eyes or to follow up with the charity to see what portion of your donation has been used for refurbishment efforts as of the end of the charity's financial year."

Most, however, can't afford to leverage quite that amount of sway when giving to charity. But just because your heart is a little bigger than your wallet doesn't mean that you can't still be proactive about following up on what's become of your charitable gift. You just have to broaden your focus.

"For donors making smaller gifts, following up on your donation requires you to look at how efficiently the charity is operating on the whole," says Styron. "Even if the charity happened to use your $100 donation on feeding hungry kids, for example, if it spent the vast majority of its other expenses on fundraising and other overhead that year, clearly this is not a group that is accomplishing what it should relative to the donations it receives."