The holiday season certainly brings out our benevolent and generous spirit, with Thanksgiving through New Year's Eve being the most popular time of year for donations. Many Americans find it easier to donate at the end of the year since they have a better sense of annual income and discretionary spending. With more 1.5 million nonprofit organizations registered in the United States, there's a philanthropic organization for just about every cause!
Considering making one or more charitable contributions this holiday season? Here are some tips to help you maximize the impact of your donations:
1. Select reputable charities.
Whether you're passionate about childhood cancer research, wildlife preservation, or the arts and humanities, take time to research your different giving options. Charity Navigator is an online vetting tool that analyzes how charitable contributions are spent, which recommends selecting charities that direct at least 65 percent of their budget to programs and services rather than overhead costs, like staff expenditures.
According to Charity Navigator, 7 out of 10 charities spend at least 75 percent of their budget on programs and services, and 9 out of 10 spend at least 65 percent. The organization also publishes lists of charities it deems to be in "deep financial trouble" and "low-funded charities with highly paid CEOs" — two warning signs that your contributions may be destined for overhead rather than essential programs and services. You may also wish to check the Better Business Bureau's Wise Giving Alliance, which evaluates and rates charities based on specific criteria.
2. Check for matching employer contributions.
Many larger companies — including 65 percent of Fortune 500 companies — offer matching gift programs as an extension of their corporate philanthropy. Since matching gift program rules vary between organizations, ask you HR department for a full list of eligible charities. Your company may also apply a minimum threshold or maximum limit to their matching gift programs. The most common minimum amount that companies match is $25, with maximums range from $1,000 to $15,000, according to Double the Donation LLC. Selecting a charity that is approved for matching contributions may increase the impact of your gift.