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The Quick and Easy Method to Determine If A Charity Is Worth Donating To

The Quick and Easy Method to Determine If A Charity Is Worth Donating To

We live in an age where things go viral on an almost daily basis. Gone are the days when ideas and videos needed time and a lot of effort to become widespread. In 2014, you can post a video of your cat wearing a birthday hat before work and come home to 2 million page views if you strike the right cord with your feline-friendly compatriots. This is great news for charities. Whereas in the past not-for-profits needed to spend a lot of money and resources getting the attention of would-be donators, now all they need is a good idea and an internet connection.

Case in point, the recent viral sensation that was and is the ALS Ice Bucket Challenge. In a few short weeks the ALS Association saw a flood of ice water turn into a flood of donations raising over $100 million compared to $2.8 million in 2013 according to Time. But with the potential for any new cause to pop up on your newsfeed on any given day, how do you sort the legitimately good causes from the organizations that might not use your money as effectively? Use this guide to find out.

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Measuring the Need

An important question to ask is if the cause at hand is a major problem that needs to be addressed. A charity that knits coats for homeless dogs may not be as pressing to give to as one that aims to fund biomedical research on a debilitating disease.

Finding Their Form 990

It turns out, every US-based charity is responsible for filling and making publically available what is called an IRS Form 990. Yes that’s right, it is the taxman to the rescue. All you need to do to find the Form 990 for most charitable organizations is to type the name of the charity and “Form 990” into your favourite search engine. If you run into any problems finding the one you are looking for you can also sign up for a free registration at a website called GuideStar where you can find financial info for most major charities.

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Income v. Expenses

Once you have the 990, all you have to do is know what to look for. Thankfully, most of the useful information is summarized in a few lines on Page 1 of the document. Line 12 denotes the organizations total revenue for the previous year and Lines 13 through 19 explain how they spent that money.

Administration Fees

Every organization will have some administrative costs associated with its operation, but are those fees in proportion to the good they are doing.  Line 16b of Form 990 tells you how much the charity spent last year on fundraising fees, which is a good indication of efficiency when compared to overall revenues.

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What Do They Spend on Grants?

Specifically Line 13 is the dollar amount given out by the charity in grants and other similar funds. This is the money that goes to do the good work the charity is known for. The higher the number on Line 13 compared to the number on Line 12, the more of your money goes towards working on the cause you were interested in when you donated.

How Much Do Their Executives Make?

Another handy feature of Form 990 is that Page 8 outlines the salaries of the organizations highest paid employees. This allows you to quickly and easily see how much of the fundraising money from the organization goes into the pockets of the people doing the fundraising.

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What Do They Spend on Marketing and Other Contract Work?

The bottom of Page 8 also gives the dollar amounts spent on private contractors for things like marketing and media productions. Take a look and ask yourself if the numbers are acceptable to you in terms of what the charity is spending money on.

Really that is all there is to it. If the charity you are interested in is not based in the US things can be a little trickier, but not much. A quick search using the charity’s name and “financial information” will generally give you what you need. For example, the detailed income and expenses for the Canadian David Suzuki Foundation can be found online here. If you’re interested in seeing what a real Form 990 looks like, this link will take you to the form for the ALS Association. And there you have it. You will be well prepared to do your research on the next viral cause that captures the global imagination. Happy giving!

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Featured photo credit: Howard Lake via flickr.com

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Last Updated on July 20, 2021

Financial Freedom is Not a Fantasy: 9 Secrets to Get You There

Financial Freedom is Not a Fantasy: 9 Secrets to Get You There

Have you ever considered your life now, and how it would be if you had more time to spend with your family and less worries about money?

Nowadays, financial stress is one of the most troublesome weights in life. If you’ve ever encountered financial stress, you know the difficulty of not having enough income to pay your obligations or bills.

Many people say that money is not the ultimate goal of life. While that’s true, money certainly plays a very significant role. The meaning of financial freedom changes with the different phases of our life, but ultimately, it is something that many people strive for.

In this article, we’ll explain how to capture that financial freedom you’ve been looking for. Read on to learn the secrets to financial freedom.

Break Free of Your Finances

Financial freedom is about having a constant flow of cash from your assets to cover all your regular needs.

When you are not worried about your income, or living paycheck to paycheck, you gain a great sense of freedom. It’s the freedom to be obtain and do what you truly need to make your way through everyday life.

Gaining financial freedom, though, is a process of growth, making small improvements and gaining emotional strength.

Though it seems hard to believe, it is really very simple to get financial freedom.

To do so, you simply need to make sure that your assets exceed your liabilities. In other words, you’ll need to find the sweet-spot where your residuals meet or surpass your expenses. This is something that you can achieve with the proper plan.

While not every person will accomplish financial freedom, the potential for anyone to do so is certainly there. Anyone can achieve this success, regardless of their income level.

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Outlined below are 9 secrets that will help you in your goals of achieving financial freedom.

1. Stop Unnecessary Spending

We often spend money inwardly, instead of objectively.

For example, you may spend when you’re anxious, depressed, restless, exhausted, from fear of missing out, or to please others. This is a very unhealthy way to handle your finances.

To stop this habitual spending, log down all your spending over the course of a month.

Just as some people keep a food diary, keep an expense diary. Remember not to just write down how much and what you spent the money on, also include the circumstances of why you spent the money. Was it an impulse buy at the checkout line or was it something you planned to purchase?

This increased self-awareness could enable you to avoid triggering situations in the future when you are considering an impulse buy.

2. Plan a Monthly Budget

This is a great opportunity to get serious.

Take a seat with your spouse or partner and make a monthly budget based on your income, not your expenses. You are never again going to spend more cash then you have on hand.

Overspending is the thing that led you to more financial obligations. Make sure you decide every month what is coming in and what will be going out and stick to that budget… no matter what.

3. Cut-up Credit Cards

Perhaps you are the type of person who always pays your credit card balance in full before the end of your billing cycle, and enjoys the reward points you gain. If this is the case, then you’re already way ahead of the game.

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If not, you may want to consider ridding your life of the burden that credit cards bring.

Many cards have strategies set up so that if you make a certain number of late payments, they will raise your interest rate much higher. This can really add up in the long run and you won’t be doing your financial situation any favors. If you’re prone to late payments or have a large balance due on your cards, cut them up!

Without proper self control on credit card spending and payments, you are basically throwing your money away. To ensure that you have better control over your spending, use only cash or debit for all future purchases (and don’t forget to pay at least your minimum payment on your cut-up cards each month!).

4. Increase Savings

There is no doubt that for a comfortable retirement you must accumulate satisfactory savings throughout your working life.

It’s good practice to save up to 15% of your income.

Start with your workplace 401(k), if you have one. If not, a Roth IRA (if you are eligible) or a traditional IRA (if you are not eligible for the Roth) are the next logical steps.

Increase in longevity means you might be able to look forward to 25 to 30 years in retirement, or possibly even significantly more. Investing now in good retirement plans will ensure that you have a guaranteed a stable monthly income when the time comes to stop working. [1]

5. Invest Wisely

Consider investing in funds.

Specifically, you will gain higher returns if you invest in different types of mutual funds such as Debt funds, Equity funds and Hybrid funds with a proper balance, although it absolutely relies on your personal preferences and sense of risk taking.

To get the most of these benefits, make sure you are investing in a variety of assets. Another resource of investing in mutual funds is SIP (Systematic Investment Plan) where you invest some money every month in funds. SIP works by averaging the per unit price of the stock.

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Mutual fund investors are aware of the benefits of an SIP (Systematic Investment Plan). For one, it is the most secure way to invest in equity mutual plans so that wealth is created over a long period of time. This plan also helps you to gain a better sense of financial discipline, which will come in handy in all your financial endeavors.

6. Invest in Gold

There isn’t really a better way to invest in gold than to have the physical gold itself in your possession.

You can purchase gold coins and bars from mints as well as from coin dealers and other private sellers.

Another way to invest in gold is through ETFs (Exchange Traded Funds).

These are is similar to mutual funds but they are exclusively investments of gold. ETFs are great because they offer more liquidity; the ETF owns the actual physical gold, stores it, and retains the value of the shares. These shares can then be bought and sold in the stock market, and one big benefit is that the transaction costs of gold ETFs are much lower than the that of physical gold.

With its consistently-increasing demand, investment in gold can be very wise long-term investment to make.

7. Stash Emergency Funds

Whether it’s a cash gift or a work bonus, always try to save any extra money that comes your way rather than making unneeded purchases.

If you get paid every other week, you’ll get an “extra” paycheck (three rather than the usual two) twice a year. Either save those paychecks towards your emergency funds or utilize the money to pay down other obligations, such as loans, credit cards or other debts.

Make it hard to get your cash.

Put your savings in an alternate bank, maybe an online bank that forces you to delay for several business days before transferred money hits your regular bank account.

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8. Find Fabulous Mentors

Find a mentor, such as a friend or family member, who has exceptional control over their finances and pay attention to everything they do.

If you do not have any friends or family that are enjoying financial freedom, then find a mentor online! There are numerous blogs and guru websites featuring the advice of many people who have reached financial freedom, and they exist primarily to let you in on how to achieve it for yourself.

There are also plentiful forums available that share tips and tricks on how to best achieve financial freedom. Read as much as you can and start changing your habits for the better.

9. Be Extra Patient

Patience is the key of financial success.

Being patient can be quite tough, especially when you’re struggling with your finances, but having faith is worth it. You’ll continuously be on the right track if you are taking the proper steps above.

So don’t be discouraged, even if you are only saving a few dollars a month; it all adds up. Within just a few years you’ll look back proudly at your accomplishments and be glad that you had the patience to get there.

Financial Freedom for All

Anyone can achieve financial freedom, regardless of their financial circumstance.

Use the tips provided above to get yourself on the track to financial freedom and toss your monetary concerns out the window. If you wish to achieve a life with financial freedom for yourself and your family then you must adopt a disciplined approach towards your finances.

Following the simple secrets above is a great start to making your money work for you, so you can work less and live more!

Featured photo credit: rawpixel via unsplash.com

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Reference

[1] Hartford Gold Group: IRA Retirement Accounts

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