Five Steps to Mindful Giving

More than $4 million was accidentally given to the wrong charity! By being mindful when donating, you can ensure your money goes where you intend.

Photo by Puwadon Sang-ngern from Pexels

Shortly after George Floyd died, I wanted to financially support causes working towards equality and racial justice. My employer even set up a matching grant program to encourage donations. I wanted to ensure my donation made an impact, so I started looking into various charities.

I was amazed to see how easy it would be to accidentally send money to the wrong organization, get scammed, or just waste money supporting ineffective charities.

A search of “Black Lives Matter” on charity database Guidestar.org brought up nearly 4,000 charities! In fact, it has been reported that donations of more than $4 million went to the unintended Black Lives Matter foundation. It’s amazing to think these errors could have been avoided through a little mindfulness.

Being charitable is perhaps one of the best ways I feel I can make an impact on our world. By taking a few minutes to be mindful about giving, we can really help ensure money is well spent and the world truly benefits.

Here are the five easy steps I use to be mindful when giving:

1. Before making a donation, I make sure to consider the source of the request. I never make a donation to some random stranger who calls or emails out of the blue. Scammers frequently call after major disasters, hoping to capitalize on the sorrow.
2. Trust but verify. In my view, charities should be fully transparent. If a charity doesn’t make available full audited reports and statements, they do not deserve my money. Period. I look up the charities website and take a peek at the annual report. One doesn’t need to be an accountant, I just look for some transparency. Any details are better than none, and a financial report fully audited by a third party is the best. I look for the amount the charity raised, and compare it to the amount they spent.
3. Investigate similar charities and compare effectiveness. Free online tools like Charity Navigator make this very easy. I can see how much money is used for the charitable purpose compared to executive salaries and advertising. I may be looking at a big name charity, but then see similar charities that are much more effective. Understanding how effective my donation will be is an important aspect of being mindful with money.
4. Take into account the charities expenses. Large charities with huge budgets rightly have huge expenses, but if I see the charity pays an excessive amount to executives or for fundraising, that is something I am sure to consider. Do I want my donation to go to the charitable purpose or to executive salaries? Certainly, large organizations may rightly pay large salaries. I find that looking at this amount as a percentage of revenue can be helpful.
5. Verify the details. When I make a donation online or using my workplace giving program, it is really important to verify my donation is going where I want. Many scammers will use names similar to well known charities in order to sound legitimate. Sometimes, even legitimate charities have names that are very similar. Verify the donation is going to the correct place by confirming the name, website, mailing address, and the EIN (Employer Identification Number) listed on the donation site.

It is important to be mindful when you are giving, so you can be sure your money is used for the intended purpose. Perhaps this practice alone could have prevented the Black Lives Matter donation situation.

Donations to charities are an important aspect of caring for each other and the planet. It’s unfortunate that scammers are out there, but that does not negate the need for charity. In this time of uncertainty in many aspects of our lives, it’s even more important to support one another. Charitable organizations are one of the most effective ways to do so.