Donating to Charity as a Gift

The idea of doing good while giving to the ones we love resonates for many of us. As the excitement of the season builds, bestowing meaningful personal gifts is a wonderful way to share and celebrate the spirit of the holidays with family and friends.

For Mindy Unger^†, mother of three, that often means a donation to a charity in the name of a friend or relative. “Sometimes I prefer to give a material gift, but there are so many people in need,” she says. “If I think it would be meaningful to the person, I try to give to organizations that can use the money.”

Both givers and charities can benefit from web technology and smart-phone use. For the giver, the donation process is easier and quicker than ever. For effective and specialized charities, a variety of rating websites can raise visibility.

“Giving gifts to charity in honor of other people for the holiday season is definitely something that we’re seeing more of,” says Olivia Larsen, research analyst with GiveWell^‡.

Here are three strategies to help maximize the impact of your charitable gift.

Choose your friend’s cause.

Start by identifying something they care deeply about. For the animal lover, perhaps a charity that focuses on preventing animal cruelty or habitat protection.

For the social activist or volunteer, a local charity focused on shelters or bringing the arts to disadvantaged schools might be just right.

You may even help forge a long-term relationship between the recipient and the charity. “That could be an incredible gift to give, and it’s a way to learn yourself,” says Susan Wolf Ditkoff, partner with The Bridge Group, a nonprofit consultancy^§.

Check the ratings.

Unfortunately, not every charity is properly managed, so you’ll want to do some research to make sure the one you choose is a credible, responsibly-run entity.

For example, Charity Navigator rates more than 9,000 501(c)3 nonprofits based on criteria like accountability, transparency, and results reporting. GuideStar's database can be a go-to source for verifying information about 1.8 million-plus nonprofits registered with the IRS.­

For small causes across the globe, try GlobalGiving, a crowdfunding site that helps review nonprofits and helps connect them with donors. If you’re pressed for time, GiveWell only recommends eight charities each year and the picks are based on an extensive analysis.

"We're not as much of a charity evaluator as a finder of great giving opportunities," says Larsen.

Check out the charity’s site.

Time spent on a charity website can help you identify the best charity to donate to. Effective charities should be clear and consistent describing their methods and results. Look for a list of major donors or sponsors, because large foundations and companies tend to do their own due diligence before writing a check.

"It makes me really happy to see that my kids are learning how good it feels to give," says Mindy Unger.

The charity’s so-called "overhead ratio"—the amount spent on expenses vs. recipients—isn't always a clear indicator of quality, Ditkoff says, because expenses can sometimes be integral to the mission. Beyond the ratio, she recommends paying close attention to the level of transparency in the charity’s description of itself and its operations.

For Unger, the gift of giving also teaches charitable values to her children, who are continuing the tradition. For her birthday, Unger's daughter raised money to buy tablets for her fourth-grade classroom through DonorsChoose.org, she reports. "It makes me really happy to see that my kids are learning how good it feels to give."