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Giving online? Do a little research first

Posted by on Mar 27, 2012 in Moneyville, Quality of Life | 0 comments

By Sheryl Smolkin

Read this article and comments on moneyville.ca

In my corporate job, bonuses were paid in September so I typically made the bulk of my charitable donations for the year in the fall before I had a chance to fritter the money away on anything else.

I can’t remember exactly when I discovered Canadahelps.org, but once I did, it made giving a whole lot easier. Instead of writing cheques and looking for addresses and stamps or re-entering data multiple times in various websites, I could go to a single web address, enter my personal data and credit card information in one place and then quickly allocate funds to the organizations I support.

I also like the Canadahelps.org feature that allows donations to be made anonymously, so I can avoid frequent direct solicitation from many of these organizations.

But an added advantage I never really thought about until now is that the CanadaHelps.org online donation website allows donors to give safely and securely to all charities in Canada that are registered with the Canada Revenue Agency.

That’s important, because online solicitation is becoming “the new door knock.” And as charities have moved online, so have charity fraudsters.

 

Related: Two Toronto charities have status revoked

 

A survey conducted for Fraud Awareness Month by Capital One Canada and CanadaHelps.org reveals that only 9 per cent of Ontario residents check to see if a charity is registered to ensure it is the real deal.

Furthermore, Canadians ages 18-34 are substantially more likely than any other generation (45 per cent) to make online donations without checking out the charity’s legitimacy. Their high rate of “spontaneous giving,” also suggests they hand over personal financial information with little or no research.

Whether you donate online, by telephone or mail in your contributions, here are some things you can do to find out about the organizations asking for your hard-earned money before you agree to part with it.

  •  Make sure your charity is registered with the Canada Revenue Agency .
  • Ask to see the charity’s financial statements.
  • Understand the impact the charity has and what difference they make in the community.
  • Avoid any charity that pressures you into making a donation or isn’t open to sharing more information about their organization.

By reviewing a charity’s financial statements you can determine how much the organization spends on administrative expenses and other overhead. The CRA has come up with a grid for evaluating fundraising expenses based on the percentage of “fundraising costs” to “fundraising revenue”.

 

Related: Audit of charities encounters resistance

 

The evaluation grid provides:

Under 35% fundraising costs: Unlikely to generate questions or concerns.

35% and above fundraising costs: The CRA will examine the average ratio over recent years to determine if there is a trend of high fundraising costs. The higher the ratio, the more likely it is that there will be concerns and a need for a more detailed assessment of expenditures.

Above 70% fundraising costs: This level will raise concerns with the CRA. The charity must be able to provide an explanation and rationale for this level of expenditure to show that it is in compliance; otherwise, it will not be acceptable.
If you choose to donate through Canadahelps.org because you like both the convenience and security features, keep in mind that a 3.9 per cent transaction charge is deducted before the funds are remitted to the charity of your choice.

Therefore you may want to consider increasing your donation by a few dollars to ensure the net amount the charity receives corresponds to your intended donation.

 

Related:Canadian charitable donations up in 2010: StatsCan

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