When you contribute to a charity—whether it’s a financial donation or volunteering your time—it just feels good. Knowing that you are helping improve the lives of others is an amazing feeling, especially during the holidays. And, nonprofits need your help, more than ever.
A recent report titled Giving USA 2023: The Annual Report on Philanthropy for the Year 2022, a publication of Giving USA Foundation, 2023, researched and written by the Indiana University Lilly Family School of Philanthropy, stated that total giving in 2022 fell to $499 billion, down 3.4% from a record year of donations in 2021. Some of the contributing factors included stock market declines at the end of 2022, when many Americans make their holiday donations, and rising inflation. Nonprofits are also struggling to recruit workers in part due to low unemployment.
According to Charity Navigator, which provides free access to data, tools and resources to guide philanthropic decision-making, small charities especially need your help. “Small charities usually don’t have money to spend on extensive fundraising campaigns. Small organizations may struggle to keep staff on the payroll and provide their services consistently as funding comes and goes. It is impossible to think about expanding service areas or creating new programs when charities aren’t sure what their financials will look like next quarter,” the organization states on its website. Charity Navigator adds that organizations led by people of color receive less funding than their white-led counterparts.
Giving to any charity is to be applauded; however, some Americans prefer to donate to organizations in their own communities, recognizing that food banks, schools, local shelters, zoos, museums and places of worship are local nonprofit institutions that have a direct impact on your community. These smaller, local organizations also are traditionally under-resourced.
According to GreatNonprofits, the leading community-sourced stories about nonprofits, “donating to your local nonprofit is one way to invest in your community’s future. Even a small donation can have a significant impact on those in need. Donations from the community go a long way to keeping these organizations functioning. In fact, for every $1 donated, the public receives about $3 in benefits. Beyond this initial benefit, charitable giving has a ‘ripple effect’ that impacts local economies in communities across the U.S. Nonprofit organizations create jobs, teach valuable skills to clients and volunteers, and increase the overall quality of life.”
Also, when you give to organizations within your community, it’s easier to see the tangible results of your donation—the local playground gets a much-needed facelift or the food bank around the corner is now serving more people in need. Speaking of food banks, Charity Navigator recommends giving cash donations instead of unused food, as food banks can use money to buy food in bulk, and they have the experience to know which products will best serve their communities.
How to Give
Instead of giving a lump-sum donation once a year, GreatNonprofits recommends that you give smaller amounts monthly. This allows the organization to budget with your monthly donation in mind and helps ease cash flow stress.
It’s also important to do your research, as not all charities operate the same. Look at sites such as Charity Navigator to see an organization’s ratings, and don’t be afraid to ask an organization for a clear outline of their expenses. For example, organizations that spend most of their donations on administrative costs are less likely to have a profound impact on the community.
Make sure that the organization is a registered public 501(c)(3) organization and ask the charity for its Employer Identification Number (EIN) so that you can conduct additional research. Most charity watchdog groups state that if detailed budgetary information is not readily available on the website, that’s a red flag. Reputable organizations shouldn’t hesitate to provide donors exactly where donations will be utilized so that you know your hard-earned money is truly helping others.
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