ILYCE: Americans have opened their hearts and their wallets in an unprecedented effort to help the victims of the recent terrorist attacks. More than a half-billion dollars has been donated to relief efforts launched by non-profit organizations like the Red Cross and the United Way as well as companies like the Tribune and National Association of Realtors. Unfortunately, there have been isolated reports of people soliciting money for a “charity” when no such charity exists. So it’s up to you, the consumer, to make sure a charity is legitimate before you pop open your checkbook.
Is your charity legitimate?
American Bar Association’s web site
ILYCE: The American Bar Association’s Taxation Department has set up a website to help donors determine if any charity is legitimate. The site also gives tips for evaluating charities as well as information on tax issues related to charitable contributions. For example:
Safe Charitable Giving
Check tax-exempt status
Check or credit card, no cash
No personal information
Source: American Bar Association
ILYCE: You’ll want to check out the tax-exempt status of the organization first. Then, be sure to send in your donation through a check or credit card. Never enclose cash in an envelope – and that includes birthday or Christmas cards – unless you want it to disappear before it gets where it’s supposed to go. Never fill out personal information. And, many people black out their address at the top of the check.
ILYCE: If you’re hoping to make the most of your charitable contribution on next year’s taxes, you’ll need to make sure you get a confirmation from the organization.
Less than $250, get receipt or keep canceled check.
More than $250, letter from organization
Property worth $5,000+, get it appraised
ILYCE: IF you’re giving less than $250, you’ll need to get a receipt for the gift or keep a copy of your canceled check. If you’re giving more than $250, the organization is required to send you a letter detailing your gift. If you’re giving property worth more than Five Thousand Dollars, you’ll need to get it appraised.
ILYCE: The ABA.ORG web site has more information about the tax requirements for charitable giving, so you’ll want to check it out.
Published: Oct 16, 2001