spending

Make the Most of Your Donor Dollars

After a series of disasters, demand is intense. Here's how to give wisely.

This year's seemingly endless string of natural disasters has inspired countless acts of heroism and generosity. But as the year-end giving season begins, some philanthropy experts worry that a phenomenon known as donor fatigue could affect individuals' willingness to support other worthwhile causes.

Many global crises don't get much news coverage in the U.S. For example, shortly after hurricanes Harvey and Irma inundated Texas and Florida, flooding in Southeast Asia killed more than 1,200 people and affected more than 40 million people, according to GiveWell, a nonprofit that supports underfunded charities. There are also long-term crises that get little attention, such as child hunger in developing countries. If you have a group of charities you regularly support, don't shortchange them because you donated to hurricane victims, says Daniel Borochoff, president of CharityWatch, a watchdog organization. "There are times in this life when you need to step up and do more, and this is one of them."

Make a Plan

Talk with your family and decide which charities you want to support—not only before year-end (which locks in a tax break for itemizers for 2017) but also in the new year. Eileen Heisman, chief executive of the National Philanthropic Trust, which provides advice to foundations and financial institutions, suggests devoting a large percentage of your charitable-giving budget—say, 80%—to the charities you've selected and setting aside 20% to respond to disasters and other short-term events.

If you really want to help—and this applies to more than disaster relief—consider committing to a monthly or quarterly donation. Recurring gifts provide a predictable source of funding, which helps charities budget for long-term projects. In addition, charities with a predictable source of funding don't have to spend as much on fund-raising, Heisman says.

If your investment port­folio has performed well this year, consider giving appreciated stock or mutual funds instead of cash. You'll help the charity and reduce your tax bill (see Trim Your Tax Bill). Most large charities accept donations of securities. If you want to contribute to smaller organizations that aren’t set up to accept contributions of securities, consider a donor-advised fund. With these funds, you can make a charitable contribution of cash or other assets, take the tax deduction on your 2017 tax return, and decide later how to distribute the money (see Charitble Giving Is a Family Affair, for more on how to choose a donor-advised fund).

Watch Out for Scams

Shortly after Harvey hit, the Department of Homeland Security warned that e-mails seeking donations could be fraudulent phishing expeditions or efforts to direct individ­uals to malware-infected websites. This scam is easy to avoid: Don't click on a link in an e-mail seeking charitable donations, even if it looks legitimate, Heisman says. If you think the cause is worthwhile, close the e-mail and go to the charity's website. To learn more about a charity, go to the websites of charity watchdogs, such as Charity Navigator and CharityWatch.

Legitimate charities, such as DonorsChoose.org, use crowdfunding to raise money, but be wary of appeals from individuals on websites such as GoFundMe.com. Some of these requests are scams. And even when the appeal is legitimate, there may be other victims with more-pressing needs. "The person who is the best marketer isn't always deserving of the most aid," Borochoff says.

Most Popular

Dying Careers You May Want to Steer Clear Of
careers

Dying Careers You May Want to Steer Clear Of

It’s tough to change, but your job could depend on it. Be flexible in your career goals – and talk with your kids about their own aspirations, because…
September 13, 2021
5 Top Dividend Aristocrats to Beef Up Your Portfolio
dividend stocks

5 Top Dividend Aristocrats to Beef Up Your Portfolio

The 65-member Dividend Aristocrats are among the market's best sources of reliable, predictable income. But these five stand out as truly elite.
September 14, 2021
7 Best Commodity Stocks to Play the Coming Boom
commodities

7 Best Commodity Stocks to Play the Coming Boom

These seven commodity stocks are poised to take advantage of a unique confluence of events. Just mind the volatility.
September 8, 2021

Recommended

The Time to Start Your Holiday Shopping Is Right Now
Making Your Money Last

The Time to Start Your Holiday Shopping Is Right Now

Shortages of the popular toys and gifts due to logistical delays could be massive this holiday shopping season. Expecting guests? Toilet paper towels,…
September 28, 2021
11 Best Things to Keep in a Safe Deposit Box
savings

11 Best Things to Keep in a Safe Deposit Box

These valuables and documents, along with some items you hold dear, should be stored securely at your bank.
September 25, 2021
9 Things You’ll Regret Keeping in a Safe Deposit Box
savings

9 Things You’ll Regret Keeping in a Safe Deposit Box

Locking up certain important documents and valuables in a bank vault could turn into a headache for you or your heirs.
September 24, 2021
17 Free or Cheap Things to Do With Your Kids During the COVID-19 Pandemic
Raising Money-Smart Kids

17 Free or Cheap Things to Do With Your Kids During the COVID-19 Pandemic

We’ve got lots of kid-friendly activities to do at home that will keep your family safe and your finances sound.
September 8, 2021