Donating to a health-related charitable cause, either in your own name or as a gift or tribute in someone else's, can be a personally gratifying experience. But if you find out later that the organization you gave to is not reputable or trustworthy, is poorly managed, or is an outright charity scam, the experience can also be heartbreaking.
That's why it's so important to do your research ahead of time to properly vet an organization before sending in a check.
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"Unfortunately, the vast majority of donors don’t bother to check out charities before contributing," says Bennett Weiner, chief operating officer of the Better Business Bureau (BBB) Wise Giving Alliance. "As a result, some will be very disappointed to later learn that the charity may not be carrying out the activities the donor had in mind or may not be well managed."
Laurie Styron, an analyst for the American Institute of Philanthropy (AIP), adds that many people mistakenly assume all charities are worthwhile, or that they are monitored by the government to ensure they are fulfilling their mission
"In truth, under the First Amendment, the government is not allowed to mandate that a charity spend a minimum percentage of your donations on bona fide charitable programs,” says Styron. “Charities just have to show that they are doing something charitable, which in the worst case can mean that only 1 percent of what you donate will be used for charitable programs."
The good news is that there are steps you can take to vet charities on your own.
Step 1: Put Away Your Checkbook or Wallet Until You Know More
Resist any pressure to donate right away. "Be wary of any appeal that is demanding an on-the-spot donation decision," says Weiner. "Legitimate charities will be happy to receive your gift at any time and won’t pressure you to give immediately."
Step 2: Visit the Organization's Web Site
Chances are that any legitimate charity has a web site, and it's well worth the keystrokes and mouse clicks to check it out. Take time to look for key information about how the organization is run.
"Does [the web site] provide easy access to fundamental pieces of information such as a description of current activities, a roster of the board of directors, and electronic access to the most recently completed IRS Form 990, the annual financial form filed with the IRS?" asks Weiner. If this type of basic information is missing, it may be a red flag.