Americans donate billions of dollars each year to nonprofits both at home and abroad.
That money is essential to helping those nonprofits carry out their missions.
But how do you know that money will be used the way you want?
Are donation dollars helping support a worthy cause or supporting high administrative costs?
You want to get the most out of your donation dollars.
Here are some tips to help.
Higher efficiency ratios are a good thing.
They illustrate a charitys productivity in providing services in line with its mission.
Finding the spending ratio is super simple.
Go to Charity Watch and search for an organization.
Youll see a program expense ratio that reflects the total expenses a charity spent on programs relative to overhead.
This is important to some donors because donation dollars can be deducted from taxable income.
That means it wont be taxed.
To determine the status of your monetary contribution, look for the charitys tax status.
you could find an organizations tax status onCharity WatchorCharity Navigator.
Or simply go to the organizations website, theIRSorGuideStar.
The IRS has a great resource aboutcharitable donation deductionsfor those looking to save money at tax time.
But remember: you could only claim charitable donations if you itemize your taxes.
And most Americans dont itemize.
According toThe Tax Foundation, about 87% of Americans took the standard deduction in 2019 instead.
For many of us, that will not be the case.
Rachel Christian is a Certified Educator in Personal Finance and a former staff writer for The Penny Hoarder.
Carson Kohler is a former staff writer.
