Checking Out Charities

How can you know that the organization you’re donating to is legitimate?

By Deborah Jeanne Sergeant

In 2017 Americans gave about $410.02 billion to charities, according to Giving USA 2018, the Annual Report on Philanthropy.

The organization also reported that 9 percent of all donations are by bequest ($35.70 billion in 2017) and that gifts from individuals plus bequests accounts for almost 80 percent of charitable gifts, compared with 20 percent of financial gifts originating from companies.

When you choose to give, how can you know that the organization is legitimate and significantly benefiting the cause you support?

Chris Gardner, president of FMF&E Wealth Management in  Syracuse, likes to reference www.charitynavigator.org.

“You can plug in any charity by name and you can find what you want,” he said. “If you can’t find it, it’s not a legitimate, 501(c)(3) charity.”

The site shows what percentage of every dollar donated goes toward overhead and what goes toward programming. Gardner said that 80 percent or more going toward the mission indicates a pretty good organization.

Gardner serves on the board of Rescue Mission of Syracuse. He advises people to visit the charity of their choice to see what they’re doing.

Lee M. Gatta, a chartered life underwriter, chartered financial consultant and accredited estate planner in DeWitt, advises clients to visit the website of the organization as well as www.irs.gov.

“There is a site within the IRS site that lists bonafide public charities,” Gatta said. “Their annual reports and tax forms are there. You can see their expenses, salaries, HR benefits and how much they give towards grants and research. To be a 501(c)(3), they have to submit this information.”

Becoming involved can also help you gain a better understanding of an organization.

Randy Zeigler, certified wealth planner with Ameriprise Financial in Oswego, said that volunteering for a charity can help you know where the money goes.

“You can see the quality of their mission and know if they’re focused on it,” Zeigler said. “If they spend two-thirds of their time on fundraising, that might not be the best place for your money to go.”

Zeigler is chairman of the Oswego County Community Foundation. He said community foundations have track records where contributors can find out plenty of information.

“Focus on some of the local organizations like the Literacy Volunteers and Oswego County Human Society,” Zeigler suggested. “Call the charity and ask for a list of their board. Contact the president and talk with the person. There’s no prohibition on that. I’d think most people would be happy to talk with someone.”

Charities can highlight their transparency by quantifying their outcome and sharing their budgets. Givers can select the charities that meet their expectations.

Carol Schmeiser, registered representative and chartered financial consultant with Urist Financial and Retirement Planning Inc. in East Syracuse, recommends considering the Central New York Community Foundation as a vehicle for making charitable contributions. Contributors can give a sum all at once for tax benefits (if you itemize your deductions), and then disburse the money from the fund later.

“If you’re over 70 and a half years old and want to give to charity, it might be best to do a charitable donation directly from your IRA to the charity itself [not to the foundation] because at that point, you have to take a minimum distribution,” Schmeiser said. “Doing it this way, the money that you’ve given isn’t taxable to you and at the same time, you’ve satisfied your minimum distribution requirement.”

She said to confirm these tax benefits with your tax professional before executing.