Find out about charities before you donate

Q: My practice is doing well, and now that my children are grown I'd like to start giving back to the community. How can I be certain the charities I donate to are legitimate and that my contributions are tax-deductible and going to people in need rather than the fundraisers?

A: You can use two sources to check on the legitimacy of a charity and see how much of your donation actually is used to help people. First is the GuideStar Web site at http://guidestar.org/. GuideStar allows you to see for free a charity's public tax return (form 990). It may be more information than you need, but it provides a complete picture.

You also can use the Web site of the National Association of State Charity Officials at http://nasconet.org/agencies/. It shows, on a state-by-state basis, how much of your donation goes to help people and how much goes to fundraising and management expenses. All donations to legitimate charities are tax-deductible.

These organizations will list, and often rate, charities. Small, new, or local charities may not be rated, however. In those cases, nothing beats a personal phone call to the charity.

Don't be shy about asking questions. Ask about whom they use to solicit donations, how donated funds are spent, and what percentage of the dollars raised actually gets to the intended recipients. (You may be surprised to find out how little goes to your intended charity when it hires outside solicitors.) And you'll feel better finding a place where you know your help is going to the people who truly need it.

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Send your money management questions to medec@advanstar.com
. Answers to our readers' questions were provided by Dan Nigito, CFP, vice president of Merion Wealth Partners, LLC in Berwyn, Pennsylvania, and Richard J. St. John, president, St. John & Associates, Inc., Roswell, Georgia.