Before You Donate to Community Service Or a Charity, Investigate the Organization

"Charity could lead to a multitude of sins," said Oscar Wilde. What did he mean? In a financial sense, he may have meant that you have to be careful about how someone will spend your donation. But perhaps he also meant that you have to be wary about what charity you donate, lest the people that they profess to help never receive your donation. Throughout history, the most preferred method of stealing money has been to steal it under the guise of charitable interest. By preying on people's sympathy, unscrupulous charities can receive a constant flow of money without having to do much convincing.

In most cases, ulterior charitable organizations don't pocket your donation outright. Instead, they trickle a small amount of money to their supposed beneficiaries and use the rest for other purposes. However, if you're considering donating to charity, the goal is not to be so careful that you decide not to donate, but to follow some time tested advice that will keep you from donating to the wrong organizations. Whether you plan to donate to community service projects, a religious charity or a secular charity, following the two tips below will keep you from giving to organizations that will misappropriate your donation.

Research the Organization

Whether the aim or your donation is toward a community service project or a general charity fund, don't give to an organization before you request its written literature and a copy of its latest annual report, which should include a list of its board of directors, its mission statement and its most recent available audited financial statements that include accompanying notes. While it would still be possible to falsify this information, most unscrupulous organizations are looking for easy targets and won't spend time going back and forth with someone who questions their legitimacy. But the rule is to not give to organizations that can't provide you with the above materials, regardless of their explanations.

Make Sure the Organization is Legitimate

Here's how easy it is to start a false charity or community service organization: you put up a website, rent cheap office space under an assumed name and have enough few phone lines so that each of your associates can represent a different department. Therefore, even if you receive convincing documents from an organization, it's best check with the American Institute of Philanthropy (AIP) in the case of charities and the Better Business Bureau Wise Giving Alliance in the case of community service organizations to see if they're familiar with the organization that you're considering. If they don't have a record of the organization, it could either be because the organization is extremely new or because it's operating as a temporary money-maker in the form of a charitable organization. In general, its best to only donate to organizations that watchdog groups know about.