Making your charitable donations count

Of the 84,000 charities in Canada, there is no doubt the vast majority of them do good work – from helping the homeless to researching cancer.  And your donations will go to support these worthwhile programs.

But just like any other “purchase”, you should research the charity before handing over your money.   And if you’re not sure about something in their financial statements or on their website, call up and ask.  As long as you know how the charity spends the money, and are agreeable to their methods, there is no legally right or wrong amount that should be spent on fundraising or administration.

Here are my tips to maximize your donations:

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1) Cut out the middleman.  If you know where you want your money to go, donate directly to that organization rather than go through a foundation or umbrella charity.  The first organization has its own fundraising and administration costs before the donation gets passed on, so in essence you are paying for two sets of admin costs.

2) Before you decide to attend an event – gala dinner, 10k race, etc – think about your ultimate goal.  Do you want to have a fancy evening out, or a reason to go out and train?  If your ultimate goal is to support a charity, consider making a straight donation of the event fee.  Often with big events, a significant portion of your donation is actually used to cover the costs of the event.

3) It’s the same thing before you buy a product that supports a charitable cause.  Ask how much money from your purchase actually goes to the charity.  Then decide if that is acceptable to you.  For example, many of the big charity lotteries end up with 10% or less of the ticket price going to the charity.

4) Ask your charity to direct your donation to a specific area.  For example, you can support a hot lunch program or research into blood cancer.  But remember, it does cost money to run a charity, so if everyone were to do this, how would they pay for the heat and lights?

5) Use a cheque or cash.  Credit cards are convenient, but it costs the charity money to process the transactions.