Make a Donation as a Holiday Gift

It’s not even Thanksgiving and there are Christmas trees in store windows. I don’t know about you, but I’m not ready for holiday decorations until Santa Claus makes his appearance at the end of the Thanksgiving Day Parade. Still, it’s time to start thinking about holiday plans and gift giving. No good waiting until the last minute.

GiftIf you have anyone on your gift list who’s difficult to shop for, I have a suggestion: make a donation to one of their favorite causes. Donations have been down the past couple of years due to the economy, yet the need is greater. A donation can be a terrific gift–nothing to store, no worrying that it’s the right size or color, and the recipient may be pleasantly surprised by your imaginative gift. You can “wrap” it in a simple envelope, along with an appropriate greeting card or note, and most non-profits will send an acknowledgment directly to the recipient on your behalf.

Guidelines for Choosing a Charitable Donation as a Gift

There are few things you ought to know before making a donation as a gift, though. Here are a few guidelines to help you choose an appropriate donation for almost anyone on your holiday gift list:

  • Choose the charity based on the recipient’s preferences. If you were giving someone a sweater as a gift, you’d choose a color and style the recipient likes in their size, not yours. Apply the same principle to making a donation. You may know what charities a friend or family member already contributes to, but if not you can base your decision on their interests. For example, a museum lover would probably enjoy having a donation made to one of her favorite museums, and usually will receive a membership card good for free general admission and discounts on programs and purchases in the gift shop.
  • Don’t go against your own preferences. It’s the flip side of the first guideline: you want to donate to a cause the recipient supports, but it doesn’t have to be something you oppose. If you and a friend disagree about some issues, pick a “neutral” cause that both of you can agree on.
  • Do your research. Most of my working life has been spent with non-profit organizations and I’ve learned a thing or two. Not all charitable organizations are alike, and not all use donated funds effectively. Whether your gift if large or small, you want it to achieve something worthwhile. There are several websites that can help you compare the fiscal efficiency of non-profit organizations. (More about that below.)
  • Let the recipient choose! One way, of course, is simply to ask. Another way is to make the gift through an organization like Kiva or DonorsChoose, that let the person who receives the gift make the final decision on how the donation is used.
  • Make it fun. If your budget allows, it doesn’t have to be a choice between a donation or a tangible gift. You can give both, and it’s fun if you match the present to the donation. (I’ll give you some ideas about that in Thursday’s post.)

Do Your Research

While it’s not the sole factor (not even the most important in many instances), and the percentage that goes to administration can vary based on the type of work an organization does and other circumstances, you would do well to look at how a non-profit spends its funds. Many non-profits designate 90% or more for mission-related programs and services, and I’m inclined to scrutinize any organization that spends less than 80% on its mission. It’s not a deal breaker, but it does make me look more closely at the reason their administrative costs are high.

You should also look at an organization’s website or their annual report (usually available for download as a PDF file on the website) to see what kind of work a non-profit is doing and what their results have been for the past year or two. I look at the work a non-profit does. Can they point to successes? Do I know anyone who’s been helped by the organization, or has first-hand experience with them? Success is harder to measure than dollars, but there ought to be some attempt at it and the results should be positive.

Resources

The Foundation Center‘s main purpose is to provide information about foundations, with some additional information about non-profit charitable organizations and non-profit management. But they have extensive information about non-profit organizations in the United States, including their Form 990s (the IRS form required to show income and expenses).

Charity Navigator focuses on the fiscal effectiveness of organizations. They’ve just published a Holiday Giving Guide on their website with advice on choosing which non-profits to contribute to and how to compare similar organizations to get the best bang for your donated buck.

GuideStar is another site that makes Form 990s available online. They also have a useful guide to charitable organizations by cause, so you can compare non-profits that do similar work to find the one that fits you and your gift recipient best.

You don’t need to check out a non-profit organization on all three of these sites; pick one you’re comfortable with, register for a free account so you get maximum (free) access to information, and do as much research as you need to be satisfied with your decision. Unless you’re planning to make a large donation, a half hour or so should give you the information you need.

One more thing: you don’t need to solve all the world’s ills. The goal here is to make a gift donation to an organization both you and the gift recipient are happy about.

Next time: Thursday’s post will suggest some ways to combine a donation with a tangible gift to be both fun and meaningful.

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