Donating the right way — 8 tips to make sure your donation really gets to where it is needed
Which organization can you entrust your money to? We give tips on how you can make the most of your donation and how to recognize dubious organizations.
1. Ask yourself: What do I want to support?
Whether in newspapers, on television, by e‑mail or at the front door — everywhere organizations are soliciting donations.
Be clear in mind what you really want to donate for. What is important to you: Children? Health? Environment? Animals? Fighting poverty? Development aid?
Pick the cause for which your heart beats.
You should ask yourself these questions:
- Which topic interests me most on a personal level?
- Do I want to support the same organization as last year or a different one?
- Where can I achieve the most with my donation?
2. Get information
Information is essential before making a decision on a donation. So check out the organization’s website and google what others say about the organization.
Donate only when you feel sufficiently informed and your research indicates that the organization is doing work of high quality.
What do I look out for on a website of an organization doing nonprofit or charity work?
The following characteristics indicate a trustworthy organization:
- The information on the site is current and not completely out of date.
- The organization provides comprehensive information about its project activities.
- The organization is recognized as a nonprofit organization and can provide proof of this with an exemption certificate from the tax office.
- The organization works transparently and publishes e.g. annual activity reports, the statutes and relevant financial data.
- The organization is recognized by reputable institutions, e.g. with the DZI seal of approval or through the PHINEO Seal of Impact
3. Ask for more information
The willingness of an organization to provide information about their mission or a concrete project is an important criterion for seriousness and professionalism.
As a donor, you should feel welcomed with any questions you may have. Especially if it is about a larger amount , you should clarify remaining questions on the phone. For very large donations, an on-site visit is advisable.
How can I tell if my questions are welcome?
Organizations that are willing to provide information can be recognized by the fact that…
- you will be offered the opportunity to get a personal impression on site,
- you get an answer to your questions,
- the organization publishes an annual report that provides transparent information on its activities, the organization itself and its finances,
- the members of the management and supervisory body are named in the brochures or on the website,
- you are offered a contact to the staff members responsible for this specific matter.
4. Pay attention to the impact
As a donor, you should feel that you can make a difference with your donation.
Evaluations and analyses can provide information about whether the work of the organization is successful. Therefore, pay attention to whether and to what extent the organization reports on results and outcomes.
How can I recognize projects that have an impact?
The organization …
- has a clear vision and relevant experience in the area for which it is raising funds„
- sets targets, makes them transparent and monitors their achievement,
- describes their progress and tangible results,
- informs regularly about donations and their use.
You can also compare organizations and projects working in the same field: Which concepts and approaches work in what way?
5. Take one more look before signing
You can also support projects with regular contributions, e.g. through a direct debit authorization or with a sustaining membership. In addition to many serious charity organizations, there are of course also black sheep on the road. That is why it is advisable, especially with regular donations, that you inform yourself in detail before signing.
Don’t just find out about the organization, but check (as with other contracts) the terms and notice periods.
What should I pay attention to before signing?
Make sure that …
- notice periods for grant agreements are visible and easy to find, and
- you don’t overspend yourself financially. Especially with larger sums, you should be as sure as possible that you can pay the contributions.
6. Donate in a way that benefits the organization most
Earmarked donations (donations in which the organization commits to using the donation for the purpose previously defined) give a good feeling because they can support a specific cause. However, earmarked donations can limit the scope of action of the organization — for example, if the purpose is too narrowly defined. The organization may then not use your donation for other activities, but only for the intended purpose. This is unfavourable because flexibility is lost. In the event of a sudden crisis, it cannot react adequately.
In this sense: You have chosen an organisation because you trust it. So you should also trust the know-how and experience of the organization. Donate without earmarking!
7. Donate in a cost-saving way
Nothing in life is for free, not even the donation. Every donation incurs costs, such as transaction costs at the bank, account management fees or other costs. Therefore, for example, payment by direct debit is cheaper than by credit card.
Two hints in this context:
- Administrative costs are an elementary and important part of nonprofit work. Organizations have to pay rent, modernize their IT, or even buy fundraising software.
- It is better to consider one large donation than many small ones.
- Donations to nonprofit organizations (from sports clubs to churches and welfare institutions) are tax-deductible. You should therefore get a donation receipt or present your bank statement to the tax office for donations of up to 200 euros.
What should I pay attention to when making a payment?
Before you proceed with a payment, you should make sure that you …
- donate by bank transfer or direct debit, as this causes the lowest costs and
- get a donation receipt for donations over 200 Euro (with online forms there is usually the question whether a donation receipt is required).
8. Be strategic with larger donations.
For larger donations you should definitely take a strategic approach!
Define key data such as objectives, funding topics, forms of investment or funding guidelines. Strategic donations contribute significantly to achieving social impacts.
If you take these tips to heart, you are one step closer to a purposeful donation!
Further information on how to develop a donation strategy or how to recognise dubious donation organisations is available as a free download! If you would like a detailed individual consultation, please contact us!
And here you will find tips and advice on what good project management in non-profit organizations can look like …