With many online fundraising and money-transfer options these days, making a cash donation is easier than ever. But don’t let your generosity lead to financial loss – budgeting, research and planning are essential to ensure all parties get the most out of your contribution.
Here are eight things to consider before you donate to a charity.
1. Know if you can afford it
Extending a hand to those in need is an admirable quality, but you should donate only if you can afford to. Always check your bank balance to see if a generous contribution is within your means.
There are other ways to help that will allow you to benefit the community and meet new people while keeping your finances in check. More on this below.
2. Prepare a budget
Knowing how much you can spend also helps you figure out how much you can donate. Once you have a budget, you can easily assess what amount or percentage of your income can be allocated to a worthy cause.
3. Do your homework
When it comes to charities in Malaysia, there is no single institutional register or regulatory organisation for charities for you to check.
Protect yourself by learning more about a charity before donating. Google it, or do a name and company profile search with the Malaysian Companies Commission to assess the results.
You could also consider doing a deeper dive by giving them a call or visiting them in person.
4. Decide local or global
Make an informed decision by knowing the pros and cons of donating locally or globally.
Local charities tend to be smaller than international organisations, where your donation is more likely to be effective and less likely to be abused. Giving locally also enables donors to interact with the charity’s staff or volunteers and have a better understanding of their mission.
With global NGOs, donations go farther since they concentrate on the world’s poorest countries, where every dollar/ringgit stretches further. Since the majority of international charities have been in operation for years, it is easier to assess their worldwide impact.
5. Donate non-cash assets
Non-cash donations could benefit charities as much as cash and still offer you a tax-deductible receipt. Items such as clothes, toiletries and technology could be useful – if not essential – for a party in need.
To maximise the impact of non-cash gifts, talk to the organisation to find out what they require.
6. Make sure you’re secure
When donating online, always check for the “https” in the URL that indicates your credit card info is safely encrypted – even though this doesn’t guarantee safety as criminals could also use encryption.
Install a secure firewall to ensure optimal online security, and always verify who you’re sending information and money to before proceeding.
7. Consult an expert
It is important to understand how much you can safely and comfortably give back to the community. A professional financial advisor could advise you on methods of giving that would better fit your budget and overall wealth-management plan.
8. Give in other ways
It’s alright if you can’t afford to give money right away. There are many ways to contribute your time and talent, such as conducting workshops, helping with bookkeeping, managing social media accounts, and creating publicity and awareness.
If you enjoy planning events, perhaps volunteer to hold a fundraiser. Or if you’re IT-savvy, you could help out with the organisation’s tech support and upgrades.
This article first appeared in MyPF. Follow MyPF to simplify and grow your personal finances on Facebook and Instagram.
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