Tuesday, 1 October 2019

Spending money on clothes, gadgets and vacations can be enormously fun.

But giving to charities can provide far deeper benefits. First, even small donations can make a big impact on people's lives. As Money magazine notes, in rural India, it costs $150 to provide home-based health care to poor families. A small donation sent to the right charity could quite literally help save a person's life there.

Of course, there are tax benefits to giving generously. And equally important, studies show there are psychological, physical and emotional benefits to the giver, according to The Cleveland Clinic. Research has found that helping others may lower people's blood pressure and stress levels, prolong life, reduce depression and boost self-esteem.

"Spending even small amounts of money on others can make a difference for our own happiness," University of British Columbia professor Elizabeth Dunn and Harvard Business School professor Michael Norton wrote in their 2013 book Happy Money, The New Science of Smarter Spending.

The authors recounted a graduate student's experiment that found people who were given $5 and instructed to spend it on someone else, or donate it to charity, were "measurably happier" at the end of the day than were those told to spend the cash on themselves.

But what is the best way to give? How do you find a charity that will use your funds wisely? Should you give locally or to large, well-established charities?

Here are a few ideas for becoming an astute giver.

Give what you can afford

Every donation helps. Many organizations will tell you exactly how far your dollars will go in helping their clients. The Houston Area Women's Center, a nonprofit providing domestic violence and rape-counseling services, says on its website that a $50 donation provides "a night of safety in our emergency shelter." In Birmingham, Alabama, the Downtown Jimmie Hale Mission, a Christian charity that helps homeless people, says $1.95 provides a meal and $20 a night in a shelter and three hot meals.

Weigh global vs. local

Should you give to the local homeless shelter where you volunteer your time or to a global relief organization? This is a personal decision, but there are objective measures to consider.

Your dollar tends to stretch farther in impoverished countries and will help address dire problems of malnourishment, disease and pollution. "In the poorest parts of the world, people suffer from very different problems. A child may die of malaria for lack of a $10 bed net, or of diarrhea for lack of a 5-cent packet of nutrients," says GiveWell, a nonprofit that rates charitable organizations based on lives saved or improved per dollar raised. GiveWell estimates it costs the Against Malaria Foundation $3,400 to save a human life.

But there are also good reasons to give locally. Doing so can help improve the quality of life and the economy in your city, writes JoAnn Turnquist, president and CEO of the Central Carolina Community Foundation. While the poor and ailing in the United States may have better access to goods and services than those in the poorest countries, charitable organizations also provide significant amounts of help. Feeding America reports that its network of 58,000 food banks serves 46.5 million people across the U.S., including 12 million children.

Investigate the charity

Whether your potential recipient is located around the corner or across an ocean, make sure the group is what it says it is and does what it says it does. Charity Navigator tracks nonprofits and provides data on how much national charities spend, how transparent and accountable they are, and offers tips on looking into groups that it hasn't rated. For example, Charity Navigator suggests that prospective donors make sure the Internal Revenue Service has granted the charity 501(c)(3) tax-exempt status, and ask to see the group's recent Forms 990, which contain financial information. Other charity evaluators include GuideStar and CharityWatch.

Consider giving directly

These days, crowdfunding sites like GoFundMe and DonorsChoose.org allow you to donate directly to causes you support. This can be a good way to connect your money to a name or face. Check  out the sites — look at their FAQs — and know what type of contribution you're making. GoFundMe, for instance, allows you to donate directly to individuals. That's a personal gift, not a tax-deductible contribution. A donation must be made to a registered non-profit to qualify for a tax deduction.

Also, be aware of the risks. Michigan's attorney general issued a consumer alert about crowdfunding, noting that as with any other form of fundraising, consumers should be aware of scammers. The Better Business Bureau has issued a guide: Crowdfunding for Charitable Causes. The BBB notes that some crowdfunding platforms charge donors fees from 4% to 20%, and that doesn't necessarily include the PayPal processing fee.

Give to disaster relief efforts— cautiously

Hurricanes, floods and tsunamis can bring out your best philanthropic instincts, but they also bring out the scammers. Charity Navigator recommends giving to an established organization with a good record of providing disaster relief in the affected region. This means avoiding "fly-by-night" groups formed in response to the event.

The group also suggests designating that your donation be used to address that specific crisis — if that's an option and that's what you want. Other tips: avoid fundraising telemarketers, be wary of emails claiming to be from crisis victims, and use the charity's official website. After Hurricane Katrina, the FBI reported that scammers set up 4,000 fake fundraising websites, Charity Navigator says.

Give your time, too

Keep in mind that giving isn't only about reaching into your pocket. Many organizations are looking for volunteers. Hand in Paw, a Birmingham nonprofit that uses therapy pets to help children and adults with physical, emotional or other special needs, says volunteers are their backbone. Giving your time, talent and self can have immeasurable benefits for you and those you help.

Keep it going

However you choose to give, you can make a habit of donating your time, money and energy. Whether you volunteer at a soup kitchen weekly, make an automatic donation monthly or send a check every year, that habit can turn into a lifetime of giving.


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