Do your homework on the charities you support

The holiday season is when many of us are inundated with requests from charities.

It’s the giving time of year, and charities want to have us extend our giving spirit to their causes. Many of these charities are working on very worthy issues that seek to make a positive difference in the lives of those who need support.

But for many people, the number of charitable solicitations makes it difficult to choose which ones to support. Too often, donors use the wrong criteria for deciding on charitable contributions.

New data on how Americans donate to charities pinpoints a lack of donor understanding and the need for simple tools to help donors give wisely. The study reveals that Americans consider finances to be the most important indicator of trust, which by itself can be a misguided element when reviewing a nonprofit organization, according to the Better Business Bureau’s Wise Giving Alliance.

The study shows the numbers of Americans who consider a charity by looking at specific indicators:

■  46 percent said finances.
■  20 percent cite ethics.
■  14 percent use name recognition of the charity.
■  11 percent said results.

In fact, there is no single measure that shows if a charity is trustworthy or not. Judging a charity by its overhead ratio or impact as sole considerations does not accurately portray the overall performance and health of an organization. When donors use only one piece of information, they may get a false sense of confidence.

Do a comprehensive analysis

Instead, it is best to review a charity and all of its various elements before donating.

The BBB makes this easier to do for people in Chicago and Northern Illinois with its Charitable Review Guide (visit www.bbb.org/Chicago and click on Charities under the Get to Know us tab). Approximately 400 charitable organizations are listed and reviewed in this guide, which also shows the reasons for the evaluation from the BBB.

These BBB standards make what would otherwise be a very large task much easier for donors, helping them to ensure they are giving their time and money to a trustworthy charity.

The most important action a donor can take before donating is to check the trustworthiness of the charity. The BBB evaluates charitable organizations on 20 holistic standards covering governance, effectiveness reporting, finances, appeal accuracy and other issues to assist donors in making informed giving decisions.

Here are some key tips to keep in mind:

■  Get the charity’s exact name.
■  Resist pressure to give on the spot.
■  Be wary of heart-wrenching appeals.
■  Press for specifics.
■  Check websites for basic information.
■  Don’t assume that every soliciting organization is tax-exempt.

For charities beyond the Chicago and Northern Illinois area, the BBB Wise Giving Alliance provides evaluations at its website, www.give.org. ●