How to Choose a Reputable Charity Where Your Money Can Make A Real Impact

If you’re fortunate enough to have more than you need, it’s always nice to give back, especially around the holidays. But where should you give? There are so many charities that could do amazing things with your money — the challenge is determining where your gift will be best used to make the biggest impact.

Here’s a rundown on how to choose a reputable charity where your dollars will make the most impact possible.

First, Decide Where You Want To Make Your Impact

A big decision to make is whether you’d prefer to give locally, on the national level or at the international level. (Or all of the above!)

If you opt for local, there are likely countless options right in your own backyard – . neighborhood soup kitchen or local animal shelter for example. The majority of the money you give will go straight to the causes that need it the most. Another benefit to donating locally is that you can immediately see the impact in your own community.

If you would prefer to make an impact on a national or global scale, there are many amazing charities that help millions of people during their times of greatest need including United Way, Habitat for Humanity, The Salvation Army or the American Red Cross, for example. The downside of larger charities is that much or your money often goes to administrative fees and not to research or actual care of the recipients they serve.

The most important rule when choosing a charity is a simple one: Make certain the organization is a certified 501(c)(3) non-profit. Unless it has an official 501(c)(3) designation, it’s not a charity — and you have no real way of knowing where your money is going. Any organization operating as a charity must be a 501(c)(3) in order to take donations. When you verify an organization’s status, you’re not only ensuring that your money will be used in the way that you intended, you can also get a tax deduction for your donation — only donations made to registered 501(c)(3) nonprofits are eligible for a tax deduction. Any legitimate charity should be happy to show you its 501(c)(3) certificate and tax ID number (this info should also be on its website).

You can start your search for a reputable charity online. For example, on social media, you can see how often a charity posts and engages with followers, the type of things they share, and then click through to their website to see if things look legit. If you find that your charity seems to exist in a black hole, with no solid public information, they might not be on the up-and-up. After you’ve checked out their website, continue your search by verifying an organization’s information on the following sites: The Better Business Bureau’s Wise Giving Alliance, the charity search tool from the IRS, Charity Navigator, Guidestar and Charity Watch. These websites keep records of which nonprofits are officially registered as 501(c)(3)s, and in many cases they’ll have a breakdown of exactly how donations are spent.

In terms of how an organization will (ideally) be using the funds it receives, follow this rule of thumb: At least 50 percent (and hopefully much more) of a charity’s annual donations should go directly to the cause, not towards administrative costs. If you see a charity paying extraordinarily high salaries to its executive team and only putting a small amount towards programming or services, you should think twice about giving them your hard-earned dollars.

Using these tips should help you find the right charity for your desired donation.