10 things to check before donating to a charity
Over the past year, we have witnessed COVID-19 drastically change the way people live, all across the world. Some changes have been good (e.g. people becoming more connected with their local community), despite the pandemic’s effects being mostly negative for businesses and public health. In these times of economic uncertainty, reviewing personal expenditure—including charitable donations—is a natural response. Scrutinising where exactly your donation is going is especially important when you may have less to give.
Australia has over 58,000 charities. We believe charities play an essential role in our country, and overseas, and that fostering a good relationship between charities and donors is extremely important. This is why Giving Guide was established.
Giving Guide helps you find charities close to your home and to your heart. Giving is a personal decision and it is important. No one wants to get it wrong. There are many stories of charities not doing the right thing, as well as donors trying to do good with their money but being at a loss to know how.
In Australia, trust between donors and charities has been declining since 2013. We want to change this by providing a place to find information that can help guide you to make the right decision on where to donate. Once you donate, it is highly unlikely you can take it back, so it is important to ensure you are comfortable with the organisation and its credentials.
Here are 10 things we think you should consider before donating. This list is not exhaustive or in order of importance. It is simply a guide—the decision to donate is ultimately yours, not ours.
- Check if the Charity has an Australian Business Number (ABN) or Australian Company Number (ACN) from the Australian Business Registry (ABR). You can use their ABN to search on Giving Guide or elsewhere.
- Search for the charity you are considering. If the charity appears on Giving Guide, it is an Australian registered charity. If it is not on Giving Guide, you can still check the Australian Charities and Not-for-profits Commission’s charity register. If you don’t find the charity there, they may not be a registered charity, and you may need to contact the organisation directly.
- Check the financial information of the charity. Giving Guide provides an individual charity page for most charities in Australia. We provide high level financial information as well as links to the charity’s governing documents, financial reports and annual reports, if they are available. We have also included website links and contact details, where available. If you cannot find the specific information about the charity you are interested in, try calling them directly.
- Do not donate under pressure. It is better to invest in the charity and cause you want to help, instead of being pressured into donating to someone else’s preferred charity. Fundraising regulation is complicated and regulated by each state, but as a general rule if you are contacted by representatives seeking donations through any medium (phone, online, face to face, etc.) they could be employed by commercial fundraising organisations. These organisations are known to take a percentage of your donation. For example, under NSW law, third parties collecting for charities are entitled to retain 50% of gross proceedings without any requirement to disclose to donors their commercial status. However, if you ask, they have to acknowledge if they are collecting on behalf of a commercial organisation.
- Check if the charity, cause or organisation is a scam. Visit Scamwatch.
- Check the ‘naughty list’ to see if a charity has received a penalty or been deregistered for failing to conform to Australian regulations.
- If you’re making a donation to help programs overseas and the main office is based in Australia, check that the charity is a member of the Australian Council for International Development (ACFID) and a signatory to its Code of Conduct. Giving Guide shows if a charity delivers benefits overseas, in which country or countries, and the amount of grants and donations marked for use outside of Australia.
- Check tax deductibility. Giving Guide provides you with the ability to search charities that offer tax deductibility through the “Advanced Search” tool. Not all charities have the ability to receive tax deductible donations, which allows the donor to claim a tax benefit by donating to charity. Less than half of all charities in Australia have Deductible Gift Recipient (DGR) status. DGR status is determined by the Australian Taxation Office (ATO).
- Read the fine print. Take the time to explicitly ask the organisation or person collecting donations the specific information you want to know. Cost-effective giving is important, as it helps the charity to do more as they receive more. If the charity is only receiving half of your donation, or in some instances paying to receive your donation, this is not cost-effective giving. The best way to give to your charity is directly. If they have DGR status, ask your employer to donate through workplace giving. Remember, the most efficient methods are: direct to your charity (not by credit card); and workplace giving (run by your employer).
- Remember that donations are a gift—by definition, something given voluntarily without payment in return. Therefore, stipulations on how your donation (i.e. gift) is used are contradictory. If you think it is important your gift be used in a particular way, do some research before giving (see the tips above!) to get a better idea of how the charity you’d like to give to spends its funds.
Although our site does not provide information about non-charitable not-for-profits, many of these tips still apply. There are approximately 600,000 non-charitable not-for-profits you may choose to help with donations, though information may be harder to obtain than it is for charities.
At Giving Guide, we want to make local charities easier to find and provide charity information in a clear and accessible way so you can be more confident in your giving.
So what are you waiting for? Start searching your local area now!
And please let us know if you find any errors, issues or problems with the site, or if you have suggestions for ways we can improve.
Integrity, honesty and unbiased assessment are at the core of Giving Guide’s mission. The charity sector is important to the economy and culture of Australia, We believe independently assessing the accountability, transparency and effectiveness of the sector beyond what is currently available is important to it's future.
Giving Guide anticipates enhancing the level of governance and transparency in the Australian charity sector. An independent charity advisor would benefit the sector by helping charities consider exceeding the existing governance standards of the Australian Charities and Not-for-profits Commission (ACNC) to the benefit of donors.
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