When considering your estate plan, you might be thinking about giving to a
charity, either out of generosity, or tax concerns, or both. There are countless
charities, and some are better than others. Many of them are excellent and do wonderful things. But too many of them are, at best,
inefficient, and at worst, complete ripoffs. It pays to do your research before
setting up a gift in your Will.
Does the charity's mission reflect your values and objectives? Is the
organization transparent with their goals, or are they astroturfing
with hidden agendas? Do they do a good job of managing resources and are efficient and responsible with your money? Will
the charity protect your personal information, or do they sell your data
to other entities? Is the charity even legit, or is it a scam?
It's often difficult to size up a charity, but here are some warning
signs to look for.
- The organization uses high-pressure tactics. Do they insist that you commit to a donation now? Do they ask for credit card information? A legitimate charity will understand that you need time to look them over and learn about them before agreeing to give.
- The charity does not have a physical address. If they only show a P.O. box or merely have an online
payment form, this should sound alarm bells with you. If you send an inquiry
and they start spamming you with solicitations, this might be a sign that you
should move on.
- The charity is inefficient with donations, or worse yet, they don't provide financials at all. All charities have operating expenses. But if a large percentage of donations pays for things like lavish salaries and professional fund-raising, much of your gift will be wasted. Sites like Charity Navigator and Charity Watch have search functions where you can look up an organization and find out where the money goes.
- The charity is not a tax-exempt non-profit or it does not readily disclose its tax-exempt status. Look to see if the organization is registered as a 501(c)(3) entity under the Internal Revenue Service Code. Search the charity's IRS Form 990. Checking with the Minnesota AG's office can also help you find good information on charities. Without getting this kind of tax status information you could end up dealing with a sham commercial enterprise disguised as a charity.
- An organization sends you an unsolicited gift. Things like t-shirts, address labels and holiday cards are a common way some organizations promote themselves and you are under no obligation to give them anything. Even if the trinket had come from a reputable charity, don't feel obligated to return in kind.
- Similar-sounding charity names (e.g., Find the Children vs Save the Children--the latter being the well-known, legit organization). Some online sleuthing can help you zero in on the bona fide charity and steer you away from the bogus, soundalike organizations.
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When putting together your estate plan, you may have questions and concerns about charitable giving. A qualified attorney can help guide you in crafting a Will that reflects your wishes.