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Charitable giving is on the rise this holiday season. After donating a record $358 billion to charity in 2014, according to Giving USA, Americans are expected to top that by nearly 5 percent this year, a report from the Indiana University Lilly Family School of Philanthropy says.
Here's what Yale Economist Dean Karlan, founder of ImpactMatters — an organization that conducts impact audits of charities — suggests that givers ask before cutting that check:
- For every $1 I send, how does the charity spend it? “The overhead ratio is just one ingredient of the sausage,” Karlan said. “What you really care about is what the sausage tastes like.”
- How is the world changing due to this charity? “You don’t need to worry or care about the mechanics of the organization. You just need to know how they’re successful in changing the world,” he said, recommending Givewell.org, a not-for-profit that offers research and analysis to help people figure out where to give.
- Does this meet my giving plan? If you’re not giving as much as you’d like today (and you have the money to do it in the long-term), set up monthly payments. Sometimes writing big checks at the end of the year is harder for people than giving smaller amounts regularly. Automating withdrawals makes it easier.
Come back tomorrow to see the next holiday savings tips unlocked!