Be Smart About Charitable Giving

By Cmdr. Bill Finch, USN (Ret) 

In 2015, Americans donated $373.25 billion to charity, a more than 4-percent increase from 2014, according to the National Philanthropic Trust.

Nonprofit organizations noted they received about half of these individual donations at the end of the year, either because of the holiday spirit of giving or a desire to give before the Internal Revenue Service (IRS) deadline. Whatever your reason for giving, how and to whom you give can make your philanthropic gift - no matter the size - more meaningful.

The 2012 Nonprofit Almanac estimates there are more than 2.3 million charities in the U.S. This number includes 40,000 registered military and veteran nonprofit organizations that support servicemembers, veterans, and military families and tens of thousands more nonprofit organizations that in some manner touch servicemembers, veterans, and military families.

With so many charities, choosing the right one can seem daunting.

Making a meaningful donation

Select a cause that is meaningful to you and one about which you are passionate. What injustice would you correct? What changed your life? From feeding hunger or curing cancer to preserving the environment or supporting an institution that positively affected you or your family members' lives, it's a personal choice and one for which there is no single right answer.

When you pick a cause in-line with your values and beliefs, you have identified your philanthropy. By doing so, you will feel less inclined to support impulsive solicitations that play on your compassion. In some cases, these solicitations do more to line the pockets of the solicitors than actually help anyone in need, but it can be hard to determine effectiveness when faced with an immediate request. It's best to research a charity before making a donation.

Narrowing down the choices

Once you have selected a cause, you typically will find many charities support that cause. How do you make sure your donation is going to a legitimate and effective organization that benefits the cause that is important to you?

Gone are the days when you could rate a charity's effectiveness solely based on which one has the lowest overhead expenses, which exposes only the poorest-managed charities. Donors' reliance on only this indicator discourages nonprofit charities from reinvesting into their own development - which, like successful for-profit organizations, they need to do. This lack of reinvestment can keep charities from achieving their long-term goals, which are important to you as a donor.

Instead of using a one-dimensional test, independent charity evaluators review charities for accounting transparency and discrepancies, defined goals, efficiency, and whether they are registered as tax-exempt with the IRS. (Read “Your Guide to Charity Evaluation Tools.”) Some charity reviews even are beginning to measure effectiveness by looking at how close a charity has come to no longer being needed; a successful charity sometimes is one that works toward its own obsolescence. Independent charity evaluators also can help determine whether an organization is fraudulent or attempting to solicit donations by using a name similar to well-known organizations.

Even if a charity has checked out, avoid the temptation to spread your donations across too many charities. According to Charity Navigator, one of the largest charity evaluators, focusing your contributions allows more of your money to go directly toward helping your cause rather than toward processing expenses.

Helping veterans

Are you still wondering which cause should be the focus of your charitable giving? Consider that in the years since Sept. 11, 2001, the U.S. Census Bureau shows 6 million Americans have served in the military, more than 2.5 million veterans have deployed to Afghanistan and Iraq, and more than 2 million still are serving in either the active or reserve forces. According to the Government Accountability Office, 1 million servicemembers will transition to the civilian sector in the next five years.

The Philanthropy Roundtable and the DoD Recovering Warrior Task Force have identified private and public charities whose efforts are making significant improvements in the lives of veterans and their families. These efforts often complement or provide assistance in health care, education, employment, and quality-of-life issues for which government support is limited or unavailable. These charitable efforts help veterans make successful and rapid transitions after military service while avoiding common problems. For example:

• Younger post-9/11 veterans are experiencing significantly higher unemployment rates than nonveterans of the same age.

• Getting into a higher education program is only half the issue; once there, veterans must figure out how to graduate. Veterans and military family members sometimes need mentoring and counseling to adapt to the new climate.

• Pro bono legal and financial advice can put veterans on the right path and prevent potential problems down the road.

• Many veterans need assistance navigating the red tape involved with obtaining physical and mental health care or direct care services that offer greater privacy and access. There's also a need to support caregivers of wounded warriors.

• Family members need support extended to them in the areas of education, employment, or quality-of-life improvements to alleviate the burdens of multiple separations, deployments, and moves.

• Injured veterans need housing and adaptive improvements while recovering. Temporary housing for families near hospitals is beneficial when veterans need specialized care.

Many veterans need our support, and the desire to help them and their families in need reflects a fitting gratitude for their service to country.