The Smarter Giving Guy » ask us

Question: Where Can I Find Charity Ratings Online?

SG Guy — Wed, 23 Sep 2009 02:57:47 +0000

Answer: Few organizations provide ratings of charities, and their coverage is very limited (especially when you consider that there are more than 1 million charities operating in the U.S.). The two most prominent are:

CharityNavigator.org describes itself as “America’s Largest Charity Evaluator” and provides “star” ratings (0 to 4 stars) on roughly 5,400 larger charities. Roughly one-third of covered charities receive a 4-star (exceptional) rating, roughly one-third receive a 3-star (good) rating, and the remainder receive 0, 1 or 2 stars (exceptionally poor, poor and needs improvement, respectively).
The American Institute of Philanthropy, through its charitywatch.org website, publishes a list of its top rated charities. Paid subscribers can obtain the full list of the 500 or so charities is has rated. 35% to 40% of covered charities receive A (includes A+ and A-) ratings.

Other organizations provide charity data. See our Charity Data & Ratings list in the right hand column.

It’s clear, from the published ratings, that some charities do solid work with the dollars entrusted to them; and others do not – just compare a 4-star charity to a 0-star charity at CharityNavigator.org.

What it boils down to is that

donors need to distinguish strong from weak charities and,
for the most part, donors need to be their own charity rating agencies.

To help you be your own charity rating agency, see the www.SeriousGivers.org website.

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Staff — Mon, 07 Sep 2009 21:08:41 +0000

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Staff — Mon, 07 Sep 2009 20:56:46 +0000

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Question: I donate. What should I expect from the charity?

SG Guy — Sun, 30 Aug 2009 17:28:24 +0000

Answer: The answer depends in part on your type of relationship with the charity (see “What types of charity relationships do you want?”). Expect less from a charity if you are a Distant giver, and much more if you are Fully Involved.

No matter what type of relationship you have with the charity, it should:

Respond reasonably to your reasonable requests for information. It’s likely reasonable for a charity to take a few days to send you written information, and to ask you to pay for copying costs.
Acknowledge you appropriately. The charity should give you choices as to how you’d like to be recognized for your donation, and follow your choice. And get your name right. If you wish your donations to be anonymous, the charity should not list you in its public donor lists.
Respect your privacy. We recommend that each charity have a written privacy policy, publicly available to donors. If the charity has a website, check there. See also items VI and IX under “A Donor Bill of Rights.”
Make effective use of your volunteer time.

Question: What should I look for in an estate planning attorney?

SG Guy — Wed, 08 Jul 2009 14:32:34 +0000

Answer: Look for the “3 Cs” (capability, cost and compatibility) –

Capability — Does the attorney have the training, skills and experience to handle the work? Look for an estate planning or elder law attorney who spends 80% or more of his or her time working on estate planning and related matters. Stay away from the “general practice” attorney (in my view it’s impossible to keep up with multiple areas of the law and do it well). Ask for references to families where the client helped has since died. If the attorney did a good job, things should have run smoothly.
Cost – Are the attorney’s charges clear, understood and acceptable to you? It’s O.K. to shop around. Look for a fixed charge, or a maximum — avoiding hourly fees whenever you can. Be sure to have a written contract for services that spells out your deal with the attorney.
Compatibility — Choose one you connect and feel comfortable with, and who listens to you. You need to be able to share private information. There are many attorneys, with different personal styles — with some you’ll be comfortable, with others you won’t.

Actually, the “3 Cs” work when dealing with all types of advisors (estate planning or otherwise).

Question: Are there simple ways to leave a gift to charity?

SG Guy — Wed, 29 Apr 2009 15:54:53 +0000

Answer: Yes! Leaving a gift to charity should be considered as part of your estate planning, but it needn’t be a complicated matter. Take a look at the following table – showing several tools available for leaving a charitable gift or bequest. The mechanics on #1, #2 and #3 are quite simple and straightforward, and #4 doesn’t have to be much more complicated.

	Tool	Complexity
1	Beneficiary on IRA or other retirement plan, life insurance, annuity, etc.	Low
2	Beneficiary on bank pay-on-death account	Low
3	Beneficiary on transfer-on-death account at mutual fund, brokerage, etc.	Low
4	Bequest in will or living trust	Low / Medium
5	Charitable Remainder Trust, Charitable Lead Trust, Private Foundation, etc.	High

Question: How can I do a good job selecting charities?

SG Guy — Fri, 17 Apr 2009 15:32:48 +0000

Answer: To do a good (as in thorough) job, you have three tasks:

Focus your giving on what’s important to you by examining what you value and care about, what you’d like to see done better or changed, and whether you want to help locally, regionally, nationally or internationally.
Create a short list of charities whose missions and service areas appear to match what’s important to you.
From your short list, examine each charity more deeply. See whether there truly is a mission match, and whether the charity is effective in performing its mission. Check charitable and tax status. Check their privacy policy. And see whether the charity responds appropriately to your requests for information.

Once you select a charity, start a relationship by making a donation or volunteering your time — kind of like a first date. Watch and see if they give you appropriate recognition (or anonymity). See how they deal with your privacy. Keep your eyes open as to how your relationship evolves.

We discuss charity selection and relationships in greater depth in our popular Smarter Giving classes.

Question: I paid $120 for a charity event ticket — how much can I deduct?

SG Guy — Fri, 10 Apr 2009 23:12:05 +0000

Answer: First, let’s make sure you’re talking about an event of a Qualified Organization (QO) — if this wasn’t a QO you don’t get to deduct anything.

Next, you have to look at the value of the meal, entertainment and other benefits you received for attending. If, for example, the value of those benefits was $70, you get to deduct $50 — the price of the ticket minus the value of benefits you received. This is true, even if the ticket says the $120 was a “donation.”

This treatment arises under what are called the IRS quid pro quo rules. See “Contributions From Which You Benefit” in IRS Publication 526.

Note to charities: In general, ticket purchasers and others who give $75 or more are required to be told in writing the value of the benefits they receive. See IRS Publication 1771.

Question: What Can a Volunteer Deduct?

SG Guy — Fri, 20 Mar 2009 15:54:36 +0000

Much more information on what a charity volunteer can deduct (including mileage rates) is now available at SeriousGivers.org at the “What can a charity volunteer deduct?” page. Go there for ongoing coverage (comments are closed on this page).

Answer: First, you can’t deduct the value of your time or services. If you volunteer for a Qualified Organization (QO), however, you can deduct on your income taxes:

For the use of your car: actual costs of gas and oil to and from the QO location, or 14 cents per mile (it’s your choice) – plus tolls and parking, in either case.
Other costs, if they are (i) unreimbursed, and (ii) directly connected with the services you gave, and (iii) incurred only because of the services you gave, and (iv) not personal, living or family expenses.

See IRS Publication 526. Be sure to keep good records.

Of course, you can only deduct these costs if you (a) file an income tax return and (b) itemize your deductions.

Question: Is this Charity a Qualified Organization (QO)?

SG Guy — Mon, 16 Mar 2009 01:45:24 +0000

Answer: For IRS purposes, you don’t get a charitable contribution deduction unless you made your donation to a Qualified Organization (QO). To be a QO, the organization must

Be a church or
Be a government or
Apply to the IRS

Concerning category #3, if it’s not listed in IRS Publication 78 it’s not a QO — and you don’t get a charitable contribution deduction. The latest IRS Publication 78 is available online only. Be careful: many organizations have similar names, and an organization could be listed by a former name or “aka” name.