ST. PAUL, MINN. (November 17, 2006) – The holiday season is almost upon us. Charities depend on the holiday giving spirit for most of their annual donations. With charities ramping up their efforts to capture holiday giving, the Charities Review Council is encouraging donors to take a close look at charities before giving.

“Donors have a right to expect that the charities they support will operate responsibly,” said Rich Cowles, executive director of the Charities Review Council of Minnesota. “Whether your gift is aimed at curing cancer or providing meals for the hungry, find out more about charities before giving. Be informed. Give smart,” Cowles said. “By giving smart, we can all work together to help charities effectively advance their important work.”

The Council’s Web site features a searchable Giving Guide, which provides detailed information about the mission and programs of charities. It also lists results of charities reviewed by the Charities Review Council’s Accountability Wizard which measures an organization’s performance in four critical areas: Public Disclosure, Governance, Financial Activity and Fundraising.

The Accountability Wizard is available to all charities soliciting in Minnesota and helps charities ensure that their operations, structure and policies meet widely accepted standards for accountability and transparency to their donors. More than 200 charities have demonstrated their commitment to openness by voluntarily participating in these public reviews. Charities that participate in Accountability Wizard reviews are granted the Council’s “Meets Standards” seals if they meet all of the Council’s standards.

Before you give to your charities of choice during this giving season, consider the following tips to give smart and safe.

1) Know the exact name of the charity. Many organizations have similar-sounding names. It is easy to assume it’s the community organization familiar to you, but this may not always be the case. Make your contribution payable to the official and full name of the charitable organization.

 2) Pay by check or credit card whenever possible. Cash can be lost or stolen. Make your check payable to the official and full name of the charitable organization. Do not provide credit card numbers unless you know the charity and you make the phone call. Anyone could call you and claim to be representing your favorite charity. If you make the call, you know to whom you are talking and where your money is going.

3) Ask the charity to provide you with information in writing. The charity should, at a minimum, be willing to provide helpful information, such as an annual report, a brochure about the organization’s programs and financial statements or their IRS Form 990 tax return. 

4) Maintain records if you plan to receive tax-deductions for charitable donations. All 501(c) 3 organizations can accept contributions and offer donors a tax deduction to the full extent of the law. Make sure to ask an organization if they are a 501(c) 3 organization before you make a donation. Note important tax deduction changes for monetary and materials donations. On August 17^th, President Bush signed into law the Pension Protection Act of 2006; a law with important changes regarding tax deductions for monetary and materials donations. Here are highlights of some of the major changes:

• The IRS will require receipts for all monetary gifts. In the past, receipts were required only for gifts over $250. Cancelled checks can be used as receipts for gifts under $250. Many charities are already preparing to help donors by sending receipts that will state the amount and date of the gift no matter the size of the contribution. Always save a receipt for your monetary donations. This provision will go into effect in 2007.
• The IRS has decided to aggressively prevent attempts to claim excessive deductions for the donation of material goods. The Pension Protection Act of 2006 has disallowed deductions for donated clothing or household items that are not “in good used condition or better.”  The same law also states that deduction can be denied if the objects have “minimal monetary value.” The new law will prevent people from donating materials that are of no use or value to charities. You may see changes in the way that material goods are received. Don’t be surprised if charities ask you new questions about the value of the items you donate. Obtain receipts if you plan to request a tax deduction. This provision went into effect when the law was signed.
• People who are 70½-years-old and older are eligible under the new law to make tax-free donations from their individual retirement accounts. There are limits for the amount of donation and the type of charity you can donate to, so find out more from a tax professional or other knowledgeable advisors.

5) Be aware of emotional or high-pressure solicitations. Unscrupulous organizations have used a variety of techniques such as bills for pledges that you didn’t make to increase your sense of obligation You may have seen solicitations that include mailing labels, greeting cards, coffee mugs or other thank-you gifts. Some charities even send a small amount of cash and ask you to “increase” it with a contribution. These tactics usually cost only pennies per mailing. So, you shouldn’t feel guilty about not sending the charity a donation. Remember: it’s illegal for an organization to demand payment for merchandise you didn’t order.

The Charities Review Council’s purpose is to encourage independent thoughtful decision making about charitable giving. By providing information, tools and resources to the giving public, the Charities Review Council helps encourage greater confidence in giving and fosters public trust in charitable organizations. For more information, visit www.smartgivers.org or call (651) 224-7030.