Not too long ago, I polled my Facebook community group and asked them a question: “What does it mean to be wealthy?” Of course, culture says you need to own three vacation homes, drive fancy cars, go on exotic vacations, and host outlandish parties. But that’s not what you said you wanted to do when you became wealthy. In fact, quite the opposite. What did you say you’re most looking forward to doing with your money?
Give it away.
Yep. A lot of the answers had to do with charitable donations. And I agree. I think giving to others is one of the best things you can do with your money. Imagine being able to leave a generous tip to the server because you’ve been in their shoes. Think about how cool it will feel to sponsor a family that is doing mission work overseas. Nothing brings joy quite like being able to bless someone.
That being said, you need to be careful and responsible about who gets your hard-earned dollars. Too many frauds spend their lives looking for ways to scam everybody they can. But by taking a few steps, you can be sure that your money is going exactly where you intended.
How to Know You’re Giving to Reputable Causes
The best way to know you’re giving to legitimate nonprofits is to do research. Several online sites, including the National Center for Charitable Statistics and ProPublica, contain a searchable database of nonprofit organizations across the United States. In that database, you can find an overview of a charitable group, its location, and its financial history—most often via IRS Form 990. This form contains the amount of contributions and gifts given to a nonprofit per year. It also lists the officers, trustees and board members, along with any salary or compensation they received.
If you can’t find information about a nonprofit’s financials online, you can request it. All nonprofits must provide copies of their three most recent Form 990 reports to anyone who requests it by mail, fax or email. If a nonprofit says they don’t have that information, don’t give money to them!
Here are a few more ways to ensure you’re giving to a good organization:
- Don’t give cash. Debit cards and checks can be traced and cancelled if an organization is exposed as criminal. Now, come Christmastime, I know you’re likely to throw some change or a spare dollar into a red kettle or local giving campaign. Those may be exceptions to the rule. Just be smart about it.
- Go directly to the site. Don’t go through links on social media outlets, websites or texts. Go to nonprofit’s website directly. That way you know your money goes where you want, and you avoid identity theft and malware.
- Watch out for warning signs. Money scams differ in their approach, but there are common red flags that should make you rethink your donation. Here are some to look for:
- The organization won’t give information about their identity, costs, or how the money will be used.
- The group can’t provide evidence that a donation is tax-deductible.
- The charity’s name looks or sounds like an established charity or nonprofit.
- The representative of the charity pressures you to make immediate contribution.
- The person or nonprofit appeals to your emotions to guilt you into giving.
- The organization asks for money in cash.
- The company’s spokesperson asks you to wire money.
- Someone asks for your Social Security number or bank account routing numbers.
- Listen to your gut. God gave you reasoning and deduction skills, so use them! If something about an organization feels off or doesn’t make sense, don’t give. Better safe than sorry. You can always go online, do your research, and give later if everything checks out.
When you give to any not-for-profit group, make sure you get a receipt. You can use your giving as a tax deduction. I know that’s not why you give, but if Uncle Sam gives you a break, take it!
Ways You Can Give to Individuals
You feel good when you give to organizations, but there’s something special about helping a specific individual or family. I guess it’s the personal connection. It’s satisfying to give to someone you know—plus you know how they are going to use the money! You probably know who you want to give to and for what reason, but just in case you’re looking for potential ways to give back, I’ve created a list for you:
- Send a kid to camp.
- Give money to a single parent struggling to make ends meet.
- Pay for a college kid’s textbooks.
- Sponsor a child in a jump rope-a-thon.
- Sponsor a runner in a charity marathon or other race.
- Provide money for parents to buy their kids Christmas gifts.
- Take a college student to lunch after church.
- Give away your old vehicle.
- Help a struggling family pay rent.
- Offer to help someone with high prescription costs.
- Buy groceries for a senior adult who is on a tight budget.
This is just a small list of ways you could give to individuals. When you give, make sure the recipient understands it’s a gift. Free and clear. Don’t get caught in the mess of loaning people money. That’s a heap of trouble you don’t want. Besides, a gift is something you offer without any expectation for a return. That’s what makes it so much fun!
There’s really no end to the ways you can give to organizations and people you know. The opportunities will present themselves in due time—you just have to keep an eye out for them!
Read how people just like you stayed motivated with their wealth-building goals and became millionaires in my new book, Everyday Millionaires: How Ordinary People Built Extraordinary Wealth—and How You Can Too. Preorder your copy today!