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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!

Featured photo credit: Howard Lake via flickr.com

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Last Updated on March 4, 2019

How to Use Credit Cards While Staying Out of Debt

How to Use Credit Cards While Staying Out of Debt

Many people will suggest that the best thing to do with your credit cards during these tough economic times is to cut them up with a pair of scissors. Indeed, if you are already in huge debt, you probably should stop using them and begin a payback strategy immediately. However, if you are not currently in trouble with your credit cards, there are wise ways to use them.

I happen to really love my credit cards so I will share with you my approach to how I use mine without getting into deep financial trouble.

Ever since about 1983 when I got my first Visa card, I continue to charge as many of my purchases as possible on credit. Everything from gas, groceries and monthly payments for services like my cable and home security monitoring are charged on credit. Despite my heavy usage, I have maintained the joy of never paying any interest fees at all on any of my credit cards.

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Here are some tips on how best to use your credit cards without falling into the trap of paying those nasty double-digit interest fees.

Do Not Treat Credit Cards as Your Funding Sources

Too many people treat their credit cards as funding sources for major purchases. Do not do this if you want to stay out of trouble. I use my credit cards as convenient financial instruments so I do not have to carry around much cash. In fact, I hate carrying cash, especially coins. When you buy things on credit, the purchases are clean and you will not get annoying coins back as change.

I do not rely on my Visa, MasterCard or American Express to fund any of my purchases, large or small. This brings me to my golden rule when it comes to whether I will pull out any of my credit cards either at a retail or online store.

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I never purchase anything with my credit cards if I do not have the actual cash on hand in my bank account.

If I really cannot pay for the item or service with cash that I already have at the bank, then I simply will not make the purchase. Remember, my credit cards are not used as funding sources. They are just convenient alternatives to actual cash in my pocket.

Make Sure to Always Pay Off Balances in Full Each Month

The next very important part of my overall strategy is to make absolutely sure that I pay the balances in full each and every month no matter how large they are. This should never be a problem if the cash has been budgeted for my purchases and secured in the bank. I have always paid my full balances each month ever since my very first credit card and this is why I never pay interest charges.

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Using Credit Cards with Rewards

Most of my credit cards are of the “no annual fees” type, including one MasterCard on a separate account I keep at home as a spare in case I lose my wallet or incur any fraudulent charges. However, I do use a main Visa card which does have an annual fee because all purchases on that card reward me with airline frequent flyer points. For me, the annual fee is worth it since I do travel and I get enough points to redeem many free flights.

You have to decide for yourself if you will charge enough purchases on credit each year without paying interest charges to warrant a credit card that rewards you with airline points (or other rewards). In my case, the answer is “yes” but that might not be the case for you.

I occasionally use a MasterCard or American Express card on small purchases just to keep those accounts active. Also, I have been to the odd retailer that accepted only a certain type of credit card, so I find that having one from each major company is quite handy. Aside from my main Visa card which earns the airline points, the rest of my cards are of the “no annual fees” variety.

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So this is how I use my credit cards without getting into any financial trouble with them. This strategy is recommended only if you are not in debt, of course. In fact, it is worth keeping in mind once you’re out of debt so that you can keep your credit cards active and treat them responsibly.

What are your credit card usage strategies? Let me know in the comments — I’d love to hear what methods you use.

Featured photo credit: Artem Bali via unsplash.com

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