Labor Day weekend fun with college football, racing & taxes
Labor Day 2014 facts, figures, fun and taxes

Checking out charities before you give

The ALS Association's Ice Bucket Challenge has been an astounding success. As of Aug. 29, the nonprofit has received $100.9 million in donations to help it fight Amyotrophic lateral sclerosis, or ALS, which also is known as Lou Gehrig's disease.

This year's one month of fundraising was 38 times more than the $2.8 million that the ALS Association raised last July 29 to Aug. 29.

Youngsters and senior citizens, Hollywood stars and regular folks, politicians and athletes had icy water dumped on them for the cause.

My favorite is the glacial shower that hockey enforcer Paul Bissonnette, who's looking to hook up with an NHL team, endured.

You can watch more of the glacial Ice Bucket challenge on YouTube.

Even a former president, my fellow Texan George W. Bush, took an icy blast for the cause, as noted last week at my other blog.

In that post I discussed the tax rules you need to follow so that you can claim a charitable deduction for your donations to ALS or other charitable groups.

A check of the Internal Revenue Service's online search tool Exempt Organizations Select Check will tell you whether the nonprofit as met the requirements for federal tax-exempt status. If a group isn't in the IRS database, it usually means that it's not approved. And that means you donation is not deductible.

Checking your charity's record: But beyond taxes -- and yes, such a place does exist -- you also need to make sure that any group to which you decide to give is a good fit for you and spends your and other donors' money in ways you approve.

Charity Navigator, a nonprofit itself that evaluates and keeps an eye on its fellow 501(c)(3) groups, notes that different types of organizations work differently and have different resource and spending requirements.

Before you give you should take a look at the group's expenses vs. how much of its money goes toward the cause it supports. How do expenditures for administrative duties and employee salaries, especially compensation for management, compare to grants?

The ALS Association measures up fairly well in this balancing act, at least according to Charity Navigator's latest report. The group dedicated to finding treatment and cure for the devastating neurodegenerative disease earned a four-star rating from the charity watchdog.

The ALS Association also notes that it is "Top Rated" by Charity Watch, and is a Better Business Bureau accredited charity as well as a Guidestar Exchange gold participant.

So spend some time at Charity Navigator and similar websites GuideStar and Give Well before giving. Look also at the BBB's Wise Giving Alliance, where you can find out whether any complaints have been filed against your charity.

Go directly to the source: You also should go directly to the charity for answers before writing that big check.

Ask the organization for its financial break-down. While, as noted earlier, you want a group that send a substantial amount of its money to support efforts, be suspicious of a group that says 100 percent of its donations go to support the cause. Everyone has some overhead.

Also check out the group's marketing materials. They should clearly state the cause it supports and explain what the charity is doing to help.

Be wary of charities that focus on what's wrong but don't want to discuss what they are doing to help or solve things.

And although the Ice Bucket Challenge has worked wonderfully for the ALS Association, don't just get caught up the excitement of such charitable events. Do your donating homework first.

Tax troubles for a Hollywood star: In addition to looking at donation strategies and tax deductions last week over at Bankrate, I also posted about the federal tax lien filed against actress Vanessa Williams.

Bankrate Taxes Blog iconThe IRS says the former Miss America didn't pay a 2011 bill of $369,249.89 so it filed the legal paperwork.

So that you don't end up in the same tax fix, my Bankrate post looks at options you can take to pay a large tax bill.

I usually post my additional tax thoughts at Bankrate Taxes Blog every Tuesday and Thursday. If you miss them there, check here at the ol' blog the following weekend for highlights and links.

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