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CNN Live Saturday
"Dollar Signs": Make The Most Of Your Caritable Donations
Aired December 06, 2003 - 16:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RENAY SAN MIGUEL, CNN ANCHOR, DOLLAR $IGNS: Welcome to DOLLAR $IGNS. Today we're going to help you make the most of your charitable donations. During the holidays, they are many appeals for help, some are legit, a lot of good causes out there, but some of them are scams.
So, how do you tell which is which? Here are some of the basics of giving wisely. Don't give cash. Always use a check made payable to the charity. Also, don't be fooled by names that look impressive or resemble the name of a well-known group.
Check before you give. Do your homework. Check out the group with the state attorney general or Better Business Bureau. And keep records of your donations.
Art Taylor with the Better Business Bureau's Wise Giving Alliance and Jennifer Openshaw with the Family Financial Network are here to give us more tips on this.
We want to thank both of you for joining us today. We appreciate your time.
ART TAYLOR, BBB WISE GIVING ALLIANCE: Thanks for having me.
SAN MIGUEL: Art, we'll go ahead and start with you. We'll get to you in a second, Jennifer.
But I know there's one more piece of advice that anybody can give when they're thinking of giving a charitable donation. That is, don't give into the pressure. Don't be in a rush to give immediately, right?
TAYLOR: Absolutely. You'll notice from the calls you get from telemarketers how much pressure they place on you to make an immediate gift.
Well, the reality is that any charity soliciting your dollar needs the money as much a week from now or a month from now as they do today. So you should take your time, ask them to send you information in the mail about what it is they intend to do with your money. And then decide if this is the type of group that is worthy of your gift.
SAN MIGUEL: And it seems to be that, you know, it should be obvious. We shouldn't have to keep saying this next piece of advice. But you never give your credit card number or a checking account number or anything like that, not just to anybody, but even to somebody who says that they're soliciting a charitable donation.
JENNIFER OPENSHAW, FAMILY FINANCIAL NETWORK: Well, yes -- TAYLOR: Well, that --
SAN MIGUEL: Jennifer, go ahead.
OPENSHAW: Of course, somebody could take cash and go off and run and spend it on something else. It is normal, though, Renay, to oftentimes use a credit card online to make a contribution to a legitimate organization. That's a key, to make sure it's a legit organization.
If you're at all unsure, then ask the organization to show you their IRS letter of their tax exempt status. But, of course, you never also want to give anybody your Social Security number.
SAN MIGUEL: Art, you know, this is -- in these days of identity theft, people do have to be reminded of this, right?
TAYLOR: Absolutely. We've heard numbers of horror stories about people who have had their financial records stolen, and as a result, have lost thousands and thousands of dollars. So we want to avoid that.
SAN MIGUEL: So let me go ahead and just -- Art, stay with you for just a second -- if people are thinking this is the time of year to give, they want to help out others in need, they should be asking a lot of questions. What kinds of questions should they ask?
TAYLOR: Well, the telemarketing questions are, in my mind, the most important because those are the ones where, again, you're pressured to make an immediate gift. So you should first ask whether the organization is -- that's telemarketing you, is actually working on behalf of the charity or if it is the charity.
Because then that leads to a series of other questions, like how much of the money will end up with the telemarketer versus with the charity? If you find out the answer to that question, you may choose not to give to the telemarketer, but give directly to the organization.
So you may also want to find out how long the organization's been in business. You want to read their annual reports. Organizations should provide you an annual report. And so there are a number of questions you'll want to ask. And most of them are simply common sense.
The thing I try to tell donors is that they are the first line defense against being scammed. But we have to be comfortable just asking simple questions. Things that just come to mind normally, like you would if you were to make any purchase.
SAN MIGUEL: And, you know, when you're asking those questions and you get some kind of an emotional appeal back, they're really, Art, are making a play on your feelings or feelings of guilt or whatever. But when you ask the questions, they don't give any information about the charity, they just keep coming at you with the emotions, that should send up a red flag right there? TAYLOR: Sure. We say be watchful of appeals that are long on emotion and short on substance. It's most of us are intrigued when we hear an appeal that is aimed at helping some disadvantaged child or patient with cancer, because these are certainly causes that tug on our heart strings.
But remember, any group you give money to that is not worthy of your gift is a dollar that could have gone to a group that was worthy of your gift. So we do have to be careful because there's a finite number of dollars out there.
SAN MIGUEL: And, you know, what both of you are saying is do your research, do your homework, get online or just ask the questions of those who are asking for your money.
Jennifer, how should people determine how much money they should give to a charity?
OPENSHAW: You know, Renay, the old tradition has been to tithe 10 percent of your income. For every $1,000, that would be $100. For some folks, that might seem like a lot. If you're making $50,000, that might be a lot. For somebody making $500,000, that might not seem so much.
The first question is what can you afford? Decide as a percent of your income and make that simply a line item in your budget, how much you're spending each month.
And I think the other big question is just simply what are your priorities? Folks who want to give - and I've heard of stories of people who give 20 percent, 30 percent of their income, are folks who really have committed their lives to giving back to other people. So, it's both your income, what you can afford and what are your priorities in life?
SAN MIGUEL: Jennifer, what if my alternatives are I want to give one big check to my favorite charity or to a favorite charity, or I want to spread it out and give smaller amounts of money to a lot of different charities? Which is the best way to go? Is there a best way to go?
OPENSHAW: I think the question is how much of an impact do you want to have? The more organizations you give money to, the more anonymous you are, but the more you're able to diversify your contributions.
If you want to have a bigger impact, maybe be more closely identified with an organization or maybe even want some recognition, then you probably want to keep it to just a couple of organizations.
The other thing is that, if you want to pay attention at all to how the organizations, in the future, are managing their money, what they're doing with it, then that means time for you to sort of check in with them, for that reason, again, I suggest probably two or three organizations. SAN MIGUEL: And there are some organizations that act as clearing houses for a bunch of different, smaller organizations. You can also check that out as well, right?
OPENSHAW: Absolutely. There are organizations that can help you make those spending decisions. One of the things, just going back to the conversation with Art, how do you make decisions? The other big thing is how much of their money are they spending on administrative things versus actually to the things that you care about?
So in general, you want an organization that doesn't spend -- or that spends as much as 60 to 65 percent of their money to program activities. So you know you're getting something back.
SAN MIGUEL: Art, we were talking about red flags earlier. A charitable appeal that comes disguised as a bill or an invoice?
TAYLOR: Yeah. Well, you know, the basic there is that this is a gift. You shouldn't be getting billed for something. An appeal should layout clearly what an organization tends to do if you are to make a gift. And when it comes in the form of a bill, a statement, suggesting that you pay an amount of money to an organization, we think that is a little bit much. So you need to get more information in the appeal than a request for an amount of money.
SAN MIGUEL: And sometimes I'm going to get a small gift in the mail along with a solicitation for advice. That should also send some warning signals, right?
TAYLOR: Absolutely. Sometimes organizations send premiums with their solicitations. And what that tends to do is put an additional stress on the donor. It makes them feel like, well, I'm getting something. Therefore, I owe something in return.
I tell my donors, don't feel that way. You should give to the organization because you feel they're going to accomplish something important. Not because they've saw fit to send you some type of premium, which you didn't ask for, in the mail.
SAN MIGUEL: It seems very sneaky, but I'm sure it work with -- it is very effective with some people out there.
I want to ask both of you, Art and Jennifer, to stay with us for just a second. Because your calls and e-mails are next on DOLLAR $IGNS. You can still send your questions to us here at dollarsigns@cnn.com or call in at 800-807-2620.
(COMMERCIAL BREAK)
SAN MIGUEL: Welcome back to DOLLAR $IGNS. If you're thinking about opening your wallet for charity this holiday season? Art Taylor joins us from the Better Business Bureau. He's in Washington D.C. Jennifer Openshaw with the Family Financial Network; she's in L.A. They're both here to help us avoid being taken by charity scams.
We want to go now to some calls and some e-mails, this first one is from Wayne in Kentucky. He's on the phone.
Wayne, welcome to DOLLAR $IGNS. What's your question?
CALLER: My question is does any organization rate charities, as Consumer Reports rates cars and home appliances?
SAN MIGUEL: Excellent question. Jennifer, do you know of any?
OPENSHAW: Actually, there are rankings that come out, and I think Art would be a better source of the exact place to go for those. But there are indeed rankings that come out on how charities spend their money effectively.
SAN MIGUEL: Art, does the Better Business Bureau do this, or are there other organizations involved here?
TAYLOR: We do evaluations of charities, national charities, in relation to 20 standards. So in the end of our work, you know if a particular charity has met these pretty tough standards.
And they are standards that cover how an organization is governed; how it deals with its organizational effectiveness; how it deals with finances; as well as, how it addresses donor privacy concerns. These are things that we cover in our standards.
And you can get a report on any number of the organizations that we evaluate by simply going to our web site, give.org.
We also have a very good publication that you can get that comes out each quarter, and we list our evaluation conclusions on all of these organizations in that publication, "The Wise Giving Guide". So you can find out about how to get that also on our web site, give.org. I think it will give you a very good sense of the quality of your operations and their ability accountability by looking at the publications on our web site.
SAN MIGUEL: Jennifer, you wanted to add something?
OPENSHAW: Yes, the other thing you can think about doing -- and I know of folks who have done this -- is go drop it on the organization, if indeed it's a local organization. Or attend an event, pay attention to what they're doing, what they're giving out, if they're giving out some of those mugs or T-shirts that maybe isn't such a good use of money, in your opinion, so you get a feel of it before you make a significant commitment.
SAN MIGUEL: All right.
TAYLOR: Yes, and one other point, there are local Better Business Bureaus in your communities that may also be involved in charity review. Be sure to call your local Better Business Bureau, if you have a question about a particular charity in your community.
SAN MIGUEL: All right. We want to go now to an e-mail. This is from Kathy in Mt. Pleasant, Michigan. "What is the maximum amount of deductible, charitable contributions a married couple can claim, and can the cancelled check be proof of the donation?"
Jennifer?
OPENSHAW: The canceled check can definitely be proof of your donation. That's why you don't want to give cash. You do want to use a check.
The other thing to remember to take the deduction, you need to itemize your expenses. For those of you who own a home, you probably should be itemizing. Your contributions then would be deductible.
SAN MIGUEL: OK. We want to go now to a phone call from Douglas in Ontario.
Douglas, thanks for joining us. What's your question?
CALLER: You know, I was just wondering if you donate to a charity and you ask for a receipt, for example -- well, should you always ask for a receipt? And how would you know that the receipt isn't just made out by a nobody and that the company is indeed a kosher company?
SAN MIGUEL: Art, could you take that one?
TAYLOR: Well, basically, what you should do is make sure you get a receipt. You should always give your donation by check. That would be one way of getting a receipt.
Now, in order to determine if the charity is eligible to give you a tax deduction, you should ask them for their forms that they get from the IRS that determine their eligibility for such a benefit to you. So these organizations can provide you with a Form 990, that they file with the IRS, and they can also provide you with a determination letter from the IRS which shows that they are, in fact, an organization that, if you give to, you can get a tax deduction.
SAN MIGUEL: All right. We want to go now to an e-mail from Howard Cohen in Dallas, Texas.
He says, "I was thinking of donating to the non-profit" -- I think it is -- "America Cares For Kids, which helps support their high schools for at-risk youth. Are there restrictions on what the activities of a non-profit are in order to be assured I can get the tax deduction?"
Jennifer, is it America Cares for Kids? Are you familiar with this?
OPENSHAW: I think it is America Cares for Kids.
The key thing, again, is to make sure they do have their tax- exempt status from the IRS because they are making sure they are using their dollars for the good as opposed to other for-profit ventures. That's the key thing to ask for there.
SAN MIGUEL: We have a phone call from Lolly in Mississippi.
Lolly, welcome. What's your question?
CALLER: My question is what to do -- I started making a list of everybody who solicited me, and I got to 175 in two weeks, and I quit.
SAN MIGUEL: Wow.
OPENSHAW: You're a big giver.
CALLER: I mean, I must be on every sucker list in the country. And my problem is what -- how to determine which is bona fide and which isn't. I mean, I don't know which is softer, my head or my heart. And I read these things, and I almost cry, and I sit down and write a check. And I think, is that stupid or what?
SAN MIGUEL: I want both of you to put in on this. Jennifer, go ahead.
OPENSHAW: You can ask them to produce to you that letter from the IRS of their tax-exempt status. You can also check them out online at the Better Business Bureau or at IRS.gov.
Remember a couple of things. If you're contributing more than $500 a year, you do need to file a certain IRS form with your taxes. And also remember that anything donated that's valued at over $5,000 -- this is just an add-on tip here -- has to be appraised by an independent entity.
SAN MIGUEL: All right. Art, you have something to add too?
TAYLOR: Sure. I would say that what happens here is that this particular donor has been on a number of lists and has given money, so every organization that buys lists will probably get her name.
What she needs to do is come up with her own giving menu, if you will. And decide for herself the type of organizations that fit with her giving ethic. And not rely on a solicitation letters. Give to the groups that she has researched, that she feels good about, and that she feels will accomplish the mission that she wants accomplished in a country.
SAN MIGUEL: Lolly sounds like a very generous person, but there are folks out there who would take advantage of that.
That's why we have both of you on today. We would ask you to stay for just a second. Stay with us. We'll take more of your calls and e-mails after this break. We'll be right back with more DOLLAR $IGNS.
(COMMERCIAL BREAK)
SAN MIGUEL: Welcome back to DOLLAR $IGNS. We're taking your calls and e-mails today about picking the best charities for your generous contributions. Sharing their advice are Art Taylor. He's with the Better Business Bureau's Wise Giving Alliance, Give.org. The web site he would send you to for more information.
And Jennifer Openshaw is with the Family Financial Network. Is there a web site for the network as well?
OPENSHAW: It's at familyfn.com. Folks can sign up now. It will be launching in January. It's based on affordable and conflict-free advice for middle-income Americans.
SAN MIGUEL: That's after the holiday season. There's all kinds of financial information they'll want from that web site, so thanks for sharing that with us.
We go now to an e-mail. Jay Rios in Binghamton, New York: "If you give shares of stock to charity, is the value of your donation (for tax purposes) the original purchase price of the shares or the current value of the shares at the time the gift is made?"
Art?
TAYLOR: Well, I think, when you start to do things like that, you should definitely get a professional tax adviser involved. I'd be reluctant to give anyone that kind of advice without knowing specifically about their situation.
SAN MIGUEL: Jennifer, can you chime in on anything like that?
OPENSHAW: Yeah. Donating appreciated stock is just a great way to contribute to an organization because it costs the donor less, and it gives the charity more.
A couple things from the donor's standpoint is that not only do you get the tax deduction you avoid the taxes as well. So a double whammy for you. And you contribute it based on the fair market value. So your contribution would be based on the whole fair market value. And of course, the charity gets it at that value. That's why it's really a win-win for both entities.
SAN MIGUEL: Yes, it sounds like. This is a viewer from Chicago, Illinois writes in.
"We were thinking of donating to charities, particularly those aimed at helping children in Iraq or Afghanistan this year. Could you let us know if we chose to do this can we also claim a tax deduction?"
Art, for folks who are targeting their charities.
TAYLOR: Certainly, you can find a charity here in the United States that is -- that has met the IRS guidelines for tax deductibility, and if their mission is to provide that type of help to children in Afghanistan or other places, that would be the type of organization you would want to support.
SAN MIGUEL: Jennifer, we have about 30 seconds left. Do you have anything to add on this? OPENSHAW: Folks should remember, that if they can't contribute with their money, they can contribute with their time. At a time when non-profits are really hurting, and people really want to give back, your time can be so much. If you have it and you can get so much back by giving directly to other people.
SAN MIGUEL: We will have to end it there. Both of you have been great. Great information for us today. Art Taylor with the Better Business Bureau, and Jennifer Openshaw with the Family Financial Network.
Thanks for joining us. Have a great holiday.
OPENSHAW: You, too.
TAYLOR: Thank you.
SAN MIGUEL: That is all the time we have for now on DOLLAR $IGNS. But stay with CNN.
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Aired December 6, 2003 - 16:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RENAY SAN MIGUEL, CNN ANCHOR, DOLLAR $IGNS: Welcome to DOLLAR $IGNS. Today we're going to help you make the most of your charitable donations. During the holidays, they are many appeals for help, some are legit, a lot of good causes out there, but some of them are scams.
So, how do you tell which is which? Here are some of the basics of giving wisely. Don't give cash. Always use a check made payable to the charity. Also, don't be fooled by names that look impressive or resemble the name of a well-known group.
Check before you give. Do your homework. Check out the group with the state attorney general or Better Business Bureau. And keep records of your donations.
Art Taylor with the Better Business Bureau's Wise Giving Alliance and Jennifer Openshaw with the Family Financial Network are here to give us more tips on this.
We want to thank both of you for joining us today. We appreciate your time.
ART TAYLOR, BBB WISE GIVING ALLIANCE: Thanks for having me.
SAN MIGUEL: Art, we'll go ahead and start with you. We'll get to you in a second, Jennifer.
But I know there's one more piece of advice that anybody can give when they're thinking of giving a charitable donation. That is, don't give into the pressure. Don't be in a rush to give immediately, right?
TAYLOR: Absolutely. You'll notice from the calls you get from telemarketers how much pressure they place on you to make an immediate gift.
Well, the reality is that any charity soliciting your dollar needs the money as much a week from now or a month from now as they do today. So you should take your time, ask them to send you information in the mail about what it is they intend to do with your money. And then decide if this is the type of group that is worthy of your gift.
SAN MIGUEL: And it seems to be that, you know, it should be obvious. We shouldn't have to keep saying this next piece of advice. But you never give your credit card number or a checking account number or anything like that, not just to anybody, but even to somebody who says that they're soliciting a charitable donation.
JENNIFER OPENSHAW, FAMILY FINANCIAL NETWORK: Well, yes -- TAYLOR: Well, that --
SAN MIGUEL: Jennifer, go ahead.
OPENSHAW: Of course, somebody could take cash and go off and run and spend it on something else. It is normal, though, Renay, to oftentimes use a credit card online to make a contribution to a legitimate organization. That's a key, to make sure it's a legit organization.
If you're at all unsure, then ask the organization to show you their IRS letter of their tax exempt status. But, of course, you never also want to give anybody your Social Security number.
SAN MIGUEL: Art, you know, this is -- in these days of identity theft, people do have to be reminded of this, right?
TAYLOR: Absolutely. We've heard numbers of horror stories about people who have had their financial records stolen, and as a result, have lost thousands and thousands of dollars. So we want to avoid that.
SAN MIGUEL: So let me go ahead and just -- Art, stay with you for just a second -- if people are thinking this is the time of year to give, they want to help out others in need, they should be asking a lot of questions. What kinds of questions should they ask?
TAYLOR: Well, the telemarketing questions are, in my mind, the most important because those are the ones where, again, you're pressured to make an immediate gift. So you should first ask whether the organization is -- that's telemarketing you, is actually working on behalf of the charity or if it is the charity.
Because then that leads to a series of other questions, like how much of the money will end up with the telemarketer versus with the charity? If you find out the answer to that question, you may choose not to give to the telemarketer, but give directly to the organization.
So you may also want to find out how long the organization's been in business. You want to read their annual reports. Organizations should provide you an annual report. And so there are a number of questions you'll want to ask. And most of them are simply common sense.
The thing I try to tell donors is that they are the first line defense against being scammed. But we have to be comfortable just asking simple questions. Things that just come to mind normally, like you would if you were to make any purchase.
SAN MIGUEL: And, you know, when you're asking those questions and you get some kind of an emotional appeal back, they're really, Art, are making a play on your feelings or feelings of guilt or whatever. But when you ask the questions, they don't give any information about the charity, they just keep coming at you with the emotions, that should send up a red flag right there? TAYLOR: Sure. We say be watchful of appeals that are long on emotion and short on substance. It's most of us are intrigued when we hear an appeal that is aimed at helping some disadvantaged child or patient with cancer, because these are certainly causes that tug on our heart strings.
But remember, any group you give money to that is not worthy of your gift is a dollar that could have gone to a group that was worthy of your gift. So we do have to be careful because there's a finite number of dollars out there.
SAN MIGUEL: And, you know, what both of you are saying is do your research, do your homework, get online or just ask the questions of those who are asking for your money.
Jennifer, how should people determine how much money they should give to a charity?
OPENSHAW: You know, Renay, the old tradition has been to tithe 10 percent of your income. For every $1,000, that would be $100. For some folks, that might seem like a lot. If you're making $50,000, that might be a lot. For somebody making $500,000, that might not seem so much.
The first question is what can you afford? Decide as a percent of your income and make that simply a line item in your budget, how much you're spending each month.
And I think the other big question is just simply what are your priorities? Folks who want to give - and I've heard of stories of people who give 20 percent, 30 percent of their income, are folks who really have committed their lives to giving back to other people. So, it's both your income, what you can afford and what are your priorities in life?
SAN MIGUEL: Jennifer, what if my alternatives are I want to give one big check to my favorite charity or to a favorite charity, or I want to spread it out and give smaller amounts of money to a lot of different charities? Which is the best way to go? Is there a best way to go?
OPENSHAW: I think the question is how much of an impact do you want to have? The more organizations you give money to, the more anonymous you are, but the more you're able to diversify your contributions.
If you want to have a bigger impact, maybe be more closely identified with an organization or maybe even want some recognition, then you probably want to keep it to just a couple of organizations.
The other thing is that, if you want to pay attention at all to how the organizations, in the future, are managing their money, what they're doing with it, then that means time for you to sort of check in with them, for that reason, again, I suggest probably two or three organizations. SAN MIGUEL: And there are some organizations that act as clearing houses for a bunch of different, smaller organizations. You can also check that out as well, right?
OPENSHAW: Absolutely. There are organizations that can help you make those spending decisions. One of the things, just going back to the conversation with Art, how do you make decisions? The other big thing is how much of their money are they spending on administrative things versus actually to the things that you care about?
So in general, you want an organization that doesn't spend -- or that spends as much as 60 to 65 percent of their money to program activities. So you know you're getting something back.
SAN MIGUEL: Art, we were talking about red flags earlier. A charitable appeal that comes disguised as a bill or an invoice?
TAYLOR: Yeah. Well, you know, the basic there is that this is a gift. You shouldn't be getting billed for something. An appeal should layout clearly what an organization tends to do if you are to make a gift. And when it comes in the form of a bill, a statement, suggesting that you pay an amount of money to an organization, we think that is a little bit much. So you need to get more information in the appeal than a request for an amount of money.
SAN MIGUEL: And sometimes I'm going to get a small gift in the mail along with a solicitation for advice. That should also send some warning signals, right?
TAYLOR: Absolutely. Sometimes organizations send premiums with their solicitations. And what that tends to do is put an additional stress on the donor. It makes them feel like, well, I'm getting something. Therefore, I owe something in return.
I tell my donors, don't feel that way. You should give to the organization because you feel they're going to accomplish something important. Not because they've saw fit to send you some type of premium, which you didn't ask for, in the mail.
SAN MIGUEL: It seems very sneaky, but I'm sure it work with -- it is very effective with some people out there.
I want to ask both of you, Art and Jennifer, to stay with us for just a second. Because your calls and e-mails are next on DOLLAR $IGNS. You can still send your questions to us here at dollarsigns@cnn.com or call in at 800-807-2620.
(COMMERCIAL BREAK)
SAN MIGUEL: Welcome back to DOLLAR $IGNS. If you're thinking about opening your wallet for charity this holiday season? Art Taylor joins us from the Better Business Bureau. He's in Washington D.C. Jennifer Openshaw with the Family Financial Network; she's in L.A. They're both here to help us avoid being taken by charity scams.
We want to go now to some calls and some e-mails, this first one is from Wayne in Kentucky. He's on the phone.
Wayne, welcome to DOLLAR $IGNS. What's your question?
CALLER: My question is does any organization rate charities, as Consumer Reports rates cars and home appliances?
SAN MIGUEL: Excellent question. Jennifer, do you know of any?
OPENSHAW: Actually, there are rankings that come out, and I think Art would be a better source of the exact place to go for those. But there are indeed rankings that come out on how charities spend their money effectively.
SAN MIGUEL: Art, does the Better Business Bureau do this, or are there other organizations involved here?
TAYLOR: We do evaluations of charities, national charities, in relation to 20 standards. So in the end of our work, you know if a particular charity has met these pretty tough standards.
And they are standards that cover how an organization is governed; how it deals with its organizational effectiveness; how it deals with finances; as well as, how it addresses donor privacy concerns. These are things that we cover in our standards.
And you can get a report on any number of the organizations that we evaluate by simply going to our web site, give.org.
We also have a very good publication that you can get that comes out each quarter, and we list our evaluation conclusions on all of these organizations in that publication, "The Wise Giving Guide". So you can find out about how to get that also on our web site, give.org. I think it will give you a very good sense of the quality of your operations and their ability accountability by looking at the publications on our web site.
SAN MIGUEL: Jennifer, you wanted to add something?
OPENSHAW: Yes, the other thing you can think about doing -- and I know of folks who have done this -- is go drop it on the organization, if indeed it's a local organization. Or attend an event, pay attention to what they're doing, what they're giving out, if they're giving out some of those mugs or T-shirts that maybe isn't such a good use of money, in your opinion, so you get a feel of it before you make a significant commitment.
SAN MIGUEL: All right.
TAYLOR: Yes, and one other point, there are local Better Business Bureaus in your communities that may also be involved in charity review. Be sure to call your local Better Business Bureau, if you have a question about a particular charity in your community.
SAN MIGUEL: All right. We want to go now to an e-mail. This is from Kathy in Mt. Pleasant, Michigan. "What is the maximum amount of deductible, charitable contributions a married couple can claim, and can the cancelled check be proof of the donation?"
Jennifer?
OPENSHAW: The canceled check can definitely be proof of your donation. That's why you don't want to give cash. You do want to use a check.
The other thing to remember to take the deduction, you need to itemize your expenses. For those of you who own a home, you probably should be itemizing. Your contributions then would be deductible.
SAN MIGUEL: OK. We want to go now to a phone call from Douglas in Ontario.
Douglas, thanks for joining us. What's your question?
CALLER: You know, I was just wondering if you donate to a charity and you ask for a receipt, for example -- well, should you always ask for a receipt? And how would you know that the receipt isn't just made out by a nobody and that the company is indeed a kosher company?
SAN MIGUEL: Art, could you take that one?
TAYLOR: Well, basically, what you should do is make sure you get a receipt. You should always give your donation by check. That would be one way of getting a receipt.
Now, in order to determine if the charity is eligible to give you a tax deduction, you should ask them for their forms that they get from the IRS that determine their eligibility for such a benefit to you. So these organizations can provide you with a Form 990, that they file with the IRS, and they can also provide you with a determination letter from the IRS which shows that they are, in fact, an organization that, if you give to, you can get a tax deduction.
SAN MIGUEL: All right. We want to go now to an e-mail from Howard Cohen in Dallas, Texas.
He says, "I was thinking of donating to the non-profit" -- I think it is -- "America Cares For Kids, which helps support their high schools for at-risk youth. Are there restrictions on what the activities of a non-profit are in order to be assured I can get the tax deduction?"
Jennifer, is it America Cares for Kids? Are you familiar with this?
OPENSHAW: I think it is America Cares for Kids.
The key thing, again, is to make sure they do have their tax- exempt status from the IRS because they are making sure they are using their dollars for the good as opposed to other for-profit ventures. That's the key thing to ask for there.
SAN MIGUEL: We have a phone call from Lolly in Mississippi.
Lolly, welcome. What's your question?
CALLER: My question is what to do -- I started making a list of everybody who solicited me, and I got to 175 in two weeks, and I quit.
SAN MIGUEL: Wow.
OPENSHAW: You're a big giver.
CALLER: I mean, I must be on every sucker list in the country. And my problem is what -- how to determine which is bona fide and which isn't. I mean, I don't know which is softer, my head or my heart. And I read these things, and I almost cry, and I sit down and write a check. And I think, is that stupid or what?
SAN MIGUEL: I want both of you to put in on this. Jennifer, go ahead.
OPENSHAW: You can ask them to produce to you that letter from the IRS of their tax-exempt status. You can also check them out online at the Better Business Bureau or at IRS.gov.
Remember a couple of things. If you're contributing more than $500 a year, you do need to file a certain IRS form with your taxes. And also remember that anything donated that's valued at over $5,000 -- this is just an add-on tip here -- has to be appraised by an independent entity.
SAN MIGUEL: All right. Art, you have something to add too?
TAYLOR: Sure. I would say that what happens here is that this particular donor has been on a number of lists and has given money, so every organization that buys lists will probably get her name.
What she needs to do is come up with her own giving menu, if you will. And decide for herself the type of organizations that fit with her giving ethic. And not rely on a solicitation letters. Give to the groups that she has researched, that she feels good about, and that she feels will accomplish the mission that she wants accomplished in a country.
SAN MIGUEL: Lolly sounds like a very generous person, but there are folks out there who would take advantage of that.
That's why we have both of you on today. We would ask you to stay for just a second. Stay with us. We'll take more of your calls and e-mails after this break. We'll be right back with more DOLLAR $IGNS.
(COMMERCIAL BREAK)
SAN MIGUEL: Welcome back to DOLLAR $IGNS. We're taking your calls and e-mails today about picking the best charities for your generous contributions. Sharing their advice are Art Taylor. He's with the Better Business Bureau's Wise Giving Alliance, Give.org. The web site he would send you to for more information.
And Jennifer Openshaw is with the Family Financial Network. Is there a web site for the network as well?
OPENSHAW: It's at familyfn.com. Folks can sign up now. It will be launching in January. It's based on affordable and conflict-free advice for middle-income Americans.
SAN MIGUEL: That's after the holiday season. There's all kinds of financial information they'll want from that web site, so thanks for sharing that with us.
We go now to an e-mail. Jay Rios in Binghamton, New York: "If you give shares of stock to charity, is the value of your donation (for tax purposes) the original purchase price of the shares or the current value of the shares at the time the gift is made?"
Art?
TAYLOR: Well, I think, when you start to do things like that, you should definitely get a professional tax adviser involved. I'd be reluctant to give anyone that kind of advice without knowing specifically about their situation.
SAN MIGUEL: Jennifer, can you chime in on anything like that?
OPENSHAW: Yeah. Donating appreciated stock is just a great way to contribute to an organization because it costs the donor less, and it gives the charity more.
A couple things from the donor's standpoint is that not only do you get the tax deduction you avoid the taxes as well. So a double whammy for you. And you contribute it based on the fair market value. So your contribution would be based on the whole fair market value. And of course, the charity gets it at that value. That's why it's really a win-win for both entities.
SAN MIGUEL: Yes, it sounds like. This is a viewer from Chicago, Illinois writes in.
"We were thinking of donating to charities, particularly those aimed at helping children in Iraq or Afghanistan this year. Could you let us know if we chose to do this can we also claim a tax deduction?"
Art, for folks who are targeting their charities.
TAYLOR: Certainly, you can find a charity here in the United States that is -- that has met the IRS guidelines for tax deductibility, and if their mission is to provide that type of help to children in Afghanistan or other places, that would be the type of organization you would want to support.
SAN MIGUEL: Jennifer, we have about 30 seconds left. Do you have anything to add on this? OPENSHAW: Folks should remember, that if they can't contribute with their money, they can contribute with their time. At a time when non-profits are really hurting, and people really want to give back, your time can be so much. If you have it and you can get so much back by giving directly to other people.
SAN MIGUEL: We will have to end it there. Both of you have been great. Great information for us today. Art Taylor with the Better Business Bureau, and Jennifer Openshaw with the Family Financial Network.
Thanks for joining us. Have a great holiday.
OPENSHAW: You, too.
TAYLOR: Thank you.
SAN MIGUEL: That is all the time we have for now on DOLLAR $IGNS. But stay with CNN.
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