Donating wisely
Educate yourself on organizations you’re interested in
Most people can’t donate to every cause, so where should your money go? Experts recommend donating to smaller organizations, where your money can have a greater impact. And you should vet those groups before donating.
From donation drives organized at work or school to fundraising campaigns on social media, holiday requests for giving seem to be everywhere. Most people can’t donate to every cause, so where should their money go?
Experts advise giving to smaller organizations — perhaps in your own community — where individual donations can have a greater impact, and vetting those groups before donating.
If someone wants to donate $25 or $100 or some other relatively modest amount, it will make a bigger difference to a smaller organization, said John List, the Kenneth C. Griffin Distinguished Service Professor in Economics at the University of Chicago. List notes that the top 1 percent of wage earners in the U.S. give 40 percent of all gifts, and they tend to give large sums to bigger, more well-known organizations.
“It’s hard for people like me … to make that kind of a difference on the bigger organizations,” he said. “The big organizations thrive on the top 1 percent. The small organizations thrive off of us.”
Noticing organizations doing good work in your own community is a good place to start, List said. People should donate to causes that matter to them, he said, whether it be the environment, disease research or social service agencies that help the poor. And there are ways to find legitimate but lesser-known organizations and make sure your donated dollars have the most impact.
“A lot of people … think it’s hard to find good information (on charities), and they’re paralyzed and give to a (big, popular) organization,” he said.
List suggested using charitynavigator.org and searching by organization size and area of interest. The website shows Internal Revenue Service data, which demonstrates that a charity is legitimate and includes how much it’s received in recent years.
People also can request information directly from a charity, List said. He suggested asking for a complete list of previous donors and how much every donated dollar produces in benefits. Keep in mind that some organizations don’t have only tangible benefits, List said. For example, the Make-A-Wish Foundation doesn’t track the number of smiles someone has in his or her last year of life, he said.
List said it’s best to avoid a lot of grassroots, GoFundMe-type fundraising because it’s hard to know where the money is going. A New Jersey couple and a homeless man were charged with theft last month after investigators said the trio had concocted a story that prompted a GoFundMe page soliciting donations for the man. Instead, officials said, the couple used the more than $400,000 in donations to buy a BMWand designer handbags, and to go on trips.
“You give to feel good about the good that you’re doing,” he said. “If it’s fraudu- lent, you’ve just destroyed the reason why you give.”
Some prefer to see an immediate impact by giving directly to someone asking for help on the street.
Though recent news of a woman stabbed to death right after giving to a panhandler in Baltimore may cause alarm in some, Anne Bowhay, spokeswoman for the Chicago Coalition for the Homeless, said most encounters people have with those on the street are rewarding.
Bowhay said that her organization simply encourages people to give however they see fit.
“If someone is asking for a handout and you want to give a dollar … people should do what they think feels right,” she said, noting that she has also seen people take the homeless into restaurants for meals and even hand them new, clean pairs of socks.
“They should do what they feel,” Bowhay said. “I think most people do that.”