Smart Giving

      Rick Emerson joined us with important tips about giving to charities. For more information, check out Rick's Zombie Economics website.

      1) How can I verify that a charity is reputable?

      • Most charities out there are on the level, and the handful of shady operators are usually fairly easy to spot.
      • Red flags include unsolicited phone calls from "charities" you've never donated toespecially if they ask for a credit card number. And be leery of groups with sound-alike names: if the "American Ted Cross" calls you at home, you might want to doublecheck before donating.
      • Remember: the more reputable the group, the more willing they are to give you specifics. They'll explain who they are, where they're based, where the money goesand they'll have it in writing.
      • Don't be afraid to doublecheck a charity that says it's doing the right thing. Sites like are a great resource for finding out if a group puts your money where their mouth is.

      2) How can I help my donation have the maximum impact?

      • Start by giving to groups that keep their overhead costs low: the rule of thumb is that a charity should spend no more than 20% of their budget on the actual operation - the rest should go to the cause. You can find this info at
      • When possible, donate to charity using a check or through an electronic payment from your bank. Remember: using a credit-card to donate is convenient, but it also gives a chunk of your money to the credit-card company, not the charity.

      3) What makes a donation tax-deductible?

      • Most importantly, the IRS must recognize the organization you're donating to as qualifying for "deductible" status. When in doubt, go to and search the group's name. Remember: political parties or action groups are generally not recognized; neither are most foreign charities.
      • If you donate more than $250 to any one group, you need written proof - the IRS will ask for it. Make sure it has the date and the amount of your donation.
      • If you receive something in return for your donation (a dinner, a trip, a collectible naugahyde tote bag), you must deduct the fair-market value of that item from the amount you donated. The remaining total is what you're allowed to deduct.

      4) What about donations of clothing, household items, a car, etc. - are they deductible?

      • In most cases, yes. The items typically have to be in good, usable conditionnot perfect, but functional. You're usually allowed to deduct the fair-market value of the itemswhat someone would realistically pay for it (in used condition). Some groups, such as The Salvation Army, have online guides which help you determine the value of things before you donate.
      • Car donations can be tricky: in some situations, the IRS now requires you to wait until the charity has accepted and resold your car before you know how much it's worth as a deduction.
      • Remember: always contact a tax advisor or financial planner for specific questions regarding deductions.

      5) There are so many worthy causes out there.when all is said and done, how does someone pick the right charity to support?

      • The bottom line is that you want to feel good about your donation - you want it to reflect what's important to you and your family. Take a moment to assess the things that are most valuable in your life.or the areas where you've been fortunate. There's almost certainly a group that addresses that concern.
      • When in doubt, stay local. As a member of the community, you'll have a strong sense of where your donation can do the most good. Local charities also have lower overhead costs, meaning that more of your dollar goes where it's most needed.