1. It’s a terrific time to be generous. With demand for charity services up, and donations to charity down, charities need our support now.
2. Stick with your budget. Philanthropy is wonderful, but first make sure to take care of yourself and those who depend on you.
3. Focus your giving on causes you care about. Don’t give to everyone.
4. Research before you give. Many charities do strong work with the moneys entrusted to them. Others, unfortunately, do not. Spend no less than 30 minutes screening a charity before you give. Look at the percentage of spending that goes to programs, review their cash reserves, check their spending on staffing, see how much they spend to raise a dollar. For more tips.
5. Select fewer charities. Not only does this help you stick with your giving focus, it means you can make better use of your research time. Let’s say you’d spend at least 30 minutes screening a charity. Give to eight, and you’ll spend four hours. Focus on two or three, and you can research more deeply, get to know each of them better, and still save time.
6. Selecting fewer charities can also mean more of your dollars go to charity programs. Let’s say you’d give $25 to each of eight charities. If the average charity spends $10 to process a gift it receives, $80 (or 40%) of the $200 you’d give goes to processing costs. If you instead give $100 to each of two charities, only $20 (or 10%) goes to processing costs. That means $60 (30%) more available for programs.
7. Scammers increase their efforts when they see people are feeling generous. The holiday season is one of those times. Every dollar scam “charities” take in is a dollar that could instead have gone to a strong charity.

Many people do much of their charitable giving at year-end. All of the above tips are also good advice year-round. Happy giving!

You can do it in three steps:

1. Find the charity’s latest Form 990 or Form 990-EZ return.
2. Find the amounts of program service expenditures and the amount of total functional expenditures shown in the return*.
3. Divide the program service expenditures by the total functional expenditures, and multiply by 100. You now have the program spending percentage for that year.

Warning: Program spending percentages should not be used standing alone. They are just a part of an overall evaluation of a charity and its performance. A charity spending a high percentage on programs, where the programs themselves accomplish little, is by no means an effective charity.

* For a 2009 or 2008 Form 990, see page 10, line 25, columns (b) and (a). For a 2009 or 2008 Form 990-EZ, see page 2, line 32 and page 1, line 17.

• On the Money — highlights the financial challenges nonprofits face and the ways in which grantmakers are both improving the situation as well as perpetuating the problem.
• Smarter Grantmaking in Challenging Economic Times — offers recommendations and examples that we hope provide some useful insights for foundation leaders.
• Is Grantmaking Getting Smarter? — a survey finds persistent gap between nonprofit needs and grantmaker practices.

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NPC, based in London, England, describes itself as a consultancy and think tank dedicated to helping funders and charities to achieve greater impact.

Download a copy, after completing a free registration, at www.philanthropycapital.org.

The NPC site contains dozens of additional free research reports on philanthropy and charities.

Read the CharityNavigator article.

Many people do much of their charitable giving at year-end. All of the above tips (except #8) are also good advice year-round. Happy giving!

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