Be Informed Before Donating To Charities

by Pam on October 5, 2012

It’s a great idea to donate money to charities; however, it is very important that you do your homework before making a commitment.  Do not let anyone pressure you into making a decision on the spot.  Be sure to tell them to come back or call back later so that you have time to look into the charity further.  You work hard to make money, so you don’t want to give it away to just anyone.  You need to make sure that the charity is legitimate and that they are not wasteful with the donations they receive.

Canadians have a great resource that will aid them in making an informed decision about who to donate to, and where their money goes.  The Canada Revenue Agency (CRA) website has a section devoted to charities, and it provides Canadians with a user friendly resource for quickly searching and learning about various charities.

Before making a donation, follow these steps to protect yourself and to make your charitable donation go as far as possible:

1. Make sure the charity is registered with the CRA

It is important to make sure that the charity that you are donating to is registered with the CRA so that you can get a donation receipt and claim your donation when you file your income tax.  Only registered charities are allowed to issue receipts for tax purposes.  To find out if the charity is registered, go to the CRA website and type in the name of the charity.

2.  Find out how they spend their money.

Once you find your particular charity, select it from the list and then click on the Registered Charity Return.  You will find information about the charity’s programs and activities, as well as where the charity operates.  You will also be able to view pie charts that show the charity’s revenue and expenses.  In addition, you will find information about how much employees are compensated.  By viewing this information, you will be able to determine how much of your donation will actually go to charitable activities and how much will be spent on overhead costs.

To see an example, I looked up the Canadian Diabetes Association on the CRA website.  Click here to see the results for this particular charity.

If you are satisfied with what you find out about the charity through the CRA website, then you can proceed with making a donation.  You will have peace of mind in knowing that your money will be put to good use and that you are supporting a cause that is important to you.

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