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Your guide to charity donations: making your dollars count

By Jana Angeles | 19 November 2019

With Christmas coming up, you may be feeling generous to make a donation towards charities that best match your current interests and passions. Perhaps you have been thinking about how you can make a difference in another person’s life by donating money towards a worthy cause or organisation. 

Either way, it’s important to do your research first before diving deep and choosing a charity that may seem reputable. You also need to factor in how much you can actually afford if you are making monthly or annual donations to the charity of your choice, and how this impacts your current cash flow.

In this guide, SkillsTalk walk you through the steps to help you choose a charity that has your best interests at heart, making your dollars count towards something meaningful.

Tips on how to make your charity donations count

  1. Use online tools to help you decide what charity fit your needs best.
  2. Check to see if your donations are tax deductible.
  3. Only donate what you can afford.
  4. Be wary of fake charities.

1. Use online tools to help you decide what charity fit your needs best.

woman contemplating decision concept

According to Probono Australia, it’s been found that 5 in 6 Australians donate to not-for-profits, with an estimated $143 billion given in the last year. In saying this, the generosity of Australia is high and people are willing to give their dollars to support a charity. It’s no surprise that Australians are inclined to support charities in other ways such as: Either way, it can be difficult to make the decision of choosing which charity is best to donate to, so with the aid of online tools, they can make it a much easier process to decide where your donations should go. The following are suggested websites that can help you review each charity and make a decision on whether or not you should sign up and become a regular donor:
  • ChangePath: if you’re currently not donating and are thinking about giving some money to your chosen charities, this website can help you decide. The main benefits of using the online website tool provided is that ChangePath have their own ratings for both transparency and financial sustainability. The majority of their data is sourced from the ACNC register and when you use the tool, it lists down your charity of choice and shows you a solid breakdown on where your donations go towards. You also have the option to filter through the list of charities and pick a category, whether that be for an environmental or mental health cause. 
  • The Good Cause Co.: we all want to make sure that the dollars we’re putting towards is making a difference, which is why a helpful blog like The Good Cause Co. can be a useful tool to use. They make recommendations and evaluations on charities across a range of fields including environmental, international aid, children’s health and more. If you prefer written reviews that give you a general overview of a charity, and whether or not you should donate, this blog is a great place to start your research.

2. Check to see if your donations are tax deductible.

Not only is making a difference in donations a good thing, but there are also some tax benefits that come with it. Donating to charities can be beneficial as it can help reduce your taxable income, which means owing less tax to the government. 

However, it’s important to keep in mind that there are specific requirements that make a donation tax deductible. It’s worth checking in with your charity preferences whether donations are tax deductible or not, and what next steps you should take when filing for income tax once the new financial year rolls around. 

According to the ATO*, these are the conditions that make a gift or donation tax deductible:
  • It must be made to a deductible gift recipient (DGR), meaning an organisation or fund that can receive tax-deductible gifts.
  • It must be a gift or a donation - voluntarily transferring money or property without the expectation of receiving anything in return.
  • The gift or donation is either money or property.
  • Must comply with any relevant gift conditions.
While your charity may have the tax-deductible stamp of approval, it’s important to recognise that there are other fees that you may pay for the charity that you can’t claim back on tax. This includes:
  • Donations made under a salary sacrifice agreement.
  • Donations made under a will.
  • Membership fees.
  • Payments you have arranged with a recipient where there are benefits provided to you.
  • Donations made to crowdfunding platforms (unless they are a registered DGR).
A DGR will normally issue you receipts of your donations to claim back on tax. Ideally, you should keep records of all the tax deductible contributions you make. If you’re missing receipts, bank statements are enough evidence that can help you claim the donation. 

*Conditions may be subject to change. Please refer to the ATO website for further updates. 

3. Only donate what you can afford.

donation concept

While being generous to charities is a positive move for all, it’s important to look at your current cash flow and see if you can afford being a regular donor. Having a budget in place before agreeing to make regular donations is important because it gives you an idea on how much you can actually afford

If you’re willing to give up some of your regular splurges on food, coffee or your entertainment subscriptions, you may be able to make it work. According to Australian moral professor, Peter Singer, he says that ideally you should be giving 1% of your income to charity donations. Those who earn more than $154,000 should give more of their income to charities. 

Otherwise, you don’t have to necessarily commit to being a regular donor if you know you would rather preserve charitable donations to occasions where its needed. For example, making a donation to an organisation in lieu of flowers and gifts for the passing of a family friend or giving a money to the less fortunate during Christmas.

Most of all, since you are giving away money, it’s important to know the why behind your donation. Make sure that you are giving because you genuinely want to - not because you feel obliged to. 

4. Be wary of fake charities.

Unfortunately, there are scammers out there who like taking advantage of people, pretending that they are fundraising for a particular cause and charity. You have to be wary about fake charities as they can take advantage of your generosity and compassion. There are a number of different ways fake charities operate.

These include:
  • Setting up fake websites (looking similar to those that are real charities)
  • Scammers calling or emailing requesting a donation
  • People approaching you or knocking at your front door asking for donations
  • People posing as agents for well-known charities or creating their own charity name. This includes those that conduct medical research or ones needing donations for health or other reasons.
These are some signs you should pay attention to if you’re unsure about making a donation to a charity that seems fake, online or in-person:
  • You already have suspicions that the letter, email or website is fake.
  • You’ve never heard of the charity.
  • The fake website looks similar to a well-known charity.
  • Person collecting donations on behalf of the charity do not have any ID or if they do have one, it looks fake.
  • You are made to feel guilty or pressured to donate (even if you don’t want to).
  • Cash donations only (they don’t accept cheque). If they do require a cheque, it’s named to them rather than the charity.
  • No receipts, or you’re given one but it has no details of the charity.
It’s important that you’re aware of scammers - both online and offline. By simply doing your research and ensuring that you don’t give out your personal information to anyone you don’t know can help you avoid getting scammed. 

Furthermore, if you have any hesitations on an organisation’s credentials, you can also refer to the Australian Charities and Not-for-Profits (ACNC) website and see a list of legitimate charities that are registered. For further tips on how to avoid getting scammed by fake charities, visit the Scamwatch website. 

Make your dollars count towards your education

If you’re looking to invest in your studies, take the opportunity to pursue an online course with Upskilled. With online learning, you can make study work for you when it comes to balancing your work and personal life. 

Offering over 80 nationally-recognised qualifications, Upskilled can help you stay on track with the support of a dedicated trainer, and access to the student support team should you run into issues during your course. Get in touch today by making an online enquiry or call 1300 009 924 and get connected with an education consultant. 

This article should not be taken as expert financial advice. Please consult a financial specialist for further advice on your circumstances. 
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