Choosing the charities you want to support is always a challenge. But in difficult economic times, when potential donors may have limited resources, it’s even more important to make the right choices. “I routinely include several charities in my budget. However, I’ve been getting so many requests from so many organizations that I’m getting overwhelmed,” Roberta Garrett explained. “How do I decide where to send my donations?”
It’s never been so important to give wisely. Many charities are operating on less than they budgeted because of increased needs and decreased donations. Because so many consumers are struggling because of the economy, charities have to stretch resources.
Nonprofits are less optimistic about the present and future fundraising climates than they were six months or a year ago, according to the most recent Philanthropic Giving Index (PGI) by the Center on Philanthropy at Indiana University. The PGI, similar to a Consumer Confidence Index for charitable giving, includes three indexes on a scale from 0 to 100, based on a semiannual national survey of nonprofit fundraising professionals. Higher scores indicate more positive or optimistic attitudes about the climate for fundraising.
In the latest survey, released in July, all three of the main indexes (overall PGI, Present Situation Index and Expectations Index) fell from their previous levels. Though these numbers rose slightly at the end of 2007, they have since declined below those reported in Summer 2007. The overall PGI was 82.8, a decrease of 6.0 percent since December 2007 and down 4.7 percent from this time last year. The Present Situation Index was 81.7, a decrease of 6.3 percent from six months ago and down 3.7 percent from one year ago. The Expectations Index, at 83.9, also dropped in the six-month and annual periods, declining by 5.8 percent.
“Concerns about the economy have affected perceptions of the charitable giving climate and previous research shows that giving grows more slowly during these times,” said Eugene R. Tempel, executive director of the Center on Philanthropy. “However, many donors still want to give.”
If you’re a prospective donor, here’s some ways to maximize the value of your gifts.
- Start by making a list of causes you want to support. Then look for charities that specifically provide those kinds of services. Smart donors don’t just support generic cancer charities, for instance. They look for organizations that have targeted goals, such as providing mammograms to at-risk women in the local community.
- Do research. Check out the charities you’re considering with watchdog groups like Charity Navigator or GuideStar.
- Both Charity Navigator and GuideStar provide background information about organizations, including whether they have tax-exempt status under section 501(c) (3) of the Internal Revenue Code.
- If the charity is not listed on the watchdog sites, ask to see its letter of determination.
- If the organization is faith based, ask to see its official listing in a directory for its denomination.
- Make sure the charity provides specific information about its programs, including numbers of people it helped through various programs.
- Be wary of look-alike charities, which try to profit by adopting a name that sounds like that of a recognized charity.
- Rather than respond to multiple random appeals, concentrate your efforts. Make one or two larger gifts to effective and efficient charities that match your personal interests rather than a handful of small donations.
- Trust your instincts. If you have doubts about a charity, don’t contribute to it.
America’s Most Charitable Cities
|2008 Ranking||2007 Ranking|
|1) Miami||1) San Diego|
|2) San Diego||2) Dallas|
|3) Houston||3) Miami|
|4) Pittsburgh||4) Colorado Springs|
|5) Boston||5) St. Louis|
|2008 Ranking||2007 Ranking|
|30) Detroit||30) Detroit|
|29) Indianapolis||29) Kansas City|
|28) Baltimore||28) Portland|
|27) Charlotte||27) San Francisco|
|26) Portland||26) Indianapolis|
Source: Charity Navigator