The new year is a great time to review your charitable donations, but how do you know if your contribution is spent wisely?

Make sure that your hard-earned money is reaching its full giving potential with a bit of research.

Consider these ideas when preparing your charitable gifts for the year:

Choose the Organization Carefully

An organization may seem like a good fit, but as you look deeper into the mission and purpose of the organization, you can find some specifics that you may not agree with. Be sure to do your homework. Study the organization: its mission, values, purpose, tactics and outcomes. Your contributions should support organizations that align with your principles. Know these factors before making the decision to donate.

Review the Organization’s Status

How can you be sure that the organization you are considering donating to is a legitimate nonprofit? It’s actually quite simple.

Use these resources to verify an organization’s status: Charity Watch and Better Business Bureau’s Wise Giving Alliance. Charity Watch gives an easy to comprehend rating based on an assessment of the organization’s financial statements. In comparison, BBB’s is a more comprehensive assessment of the organization’s standards for charity accountability, but does not make rating comparisons between organizations that meet the standards. Both tools will be useful in determining the best nonprofit for your contributions. Both sites include tax status information, which means you can confirm that your chosen organization is a 501(c)3 nonprofit – meaning that your donations may be tax deductible!

Analyze the Organization’s Financial Records

One of the most important steps you can take in choosing a nonprofit is to review their financial statements and spending ratio. When you are giving a charitable donation, you likely want a large majority of your contribution to go to the cause the nonprofit is supporting as opposed to overhead costs.

Through Charity Navigator, you can review your chosen nonprofit’s program percentage – the percentage of the organization’s revenue that is spent on programs and services. A general rule of thumb is that at least 65% of the organization’s profit should go into program costs.

Though this number can be very useful in making decisions on which organization to support, a program percentage lower than 65% should not necessarily rule out an organization. This metric is merely a tool to aid your decision-making process.

Ensure Your Donation is Secure

Don’t allow your charitable contribution to go into the hands of scammers or for-profit marketers. Never make your donation from an incoming phone call. You may not actually be talking with representatives for the organization or the nonprofit could be spending a large portion of its revenue on telemarketers. Instead, collect information on the organization from incoming calls and, if the nonprofit interests you, independently validate the stated information through your own research.

When you are ready to make your donation, the best way to do so is through the nonprofit’s website. This is the most secure and valid form of transaction.

Use Your Donation as an Investment

Consider how you are donating to a nonprofit to maximize the impact of your donation dollars. View your donation as an investment in the nonprofit and cause that you are supporting.

Your contribution will go further by giving few larger investments rather than many small investments. Narrow your contributions to a couple of charities that you feel the most passionate about.

You can also maximize your contribution by giving in the form of monetary donation as opposed to material items. This type of donation lowers the overhead costs associated with the handling and transportation of contributions, therefore making a larger portion of your donation go directly to the cause you’re supporting.


Giving to a cause close to your heart can be rewarding. Not only can you write it off in your taxes, but you can also see the development of the nonprofits you support and the positive outcomes to your chosen cause.

Contact Mid-Minnesota Federal Credit Union with any additional questions.