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Make charitable contributions carefully

Make charitable contributions carefully

By Carla Hindman, Director of Financial Education, Visa Canada

Getting the most bang for your buck is a badge of honour these days, whether you're car shopping, choosing a university or just comparing loaves of bread. One area where you really don't want to misspend your hard-earned dollars is charitable donations.

There is no shortage of non-profit organizations competing for contributions, but quality and effectiveness vary significantly, so you should do a little research before donating your time or money. Here are a few suggestions:

Pick the right cause. Many people prefer to support organizations that champion issues close to their heart, whether it's feeding the hungry, environmental protection or working to cure a disease. Also consider whether you want to target local organizations or prefer to have a more national or global impact.

Familiarize yourself with their operations. Study the organization's website, annual report and mission statement. Speak to staff members or volunteers, or volunteer there yourself. Or, if you know someone who has used their services, ask for impressions of the organization's efficiency and client helpfulness.

Do your homework. In these tough times, many non-profits are experiencing increased demand for their services in the face of declining contributions and government funding. Avoid charities that spend heavily on salaries, advertising, fund-raising and other administrative expenses (sometimes misreported as "program development," or other euphemisms). Ideally, at least 75 percent of contributions should go directly to beneficiary programs.

You can read about different charities' breakdown of funds either in their own annual reports, or by searching online. You can also try the Better Business Bureau (, which rates whether organizations have met its standards of accountability, including ethical conduct and honest solicitation practices.

Be tax-smart. Although your kids' baseball team may be a worthy cause, be aware that only contributions made to registered charitable organizations qualify for tax deductions. The Canada Revenue Agency maintains a searchable list of Canadian charities called the Charities Listings ( , which can be used to confirm whether a charity is eligible to issue official donation receipts. You can also find information on registered charities' financial information and activities.

Make your money go further. Many companies offer donation matching for their employees. Investigate whether your employer offers such a program; it's a great way to make your dollars go even further.

Be on fraud alert. Unfortunately, some unscrupulous people and organizations will take advantage of your desire to help others – if you let them. A few tips:

  • Be suspicious of telemarketing and email solicitations. When in doubt, hang up and contact the organization yourself.
  • Be aware that scammers often choose names that are similar to those of legitimate organizations.
  • Never give out personal or credit card information unless you initiate the contact.

More people than ever need our charitable assistance. Just be sure you're contributing to organizations that can do the most good.

This article is intended to provide general information and should not be considered legal, tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how certain laws apply to your situation and about your individual financial situation.

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