In times of tragedy we feel a deep need to make sense of an often chaotic world and to find order within it by acting upon it in some way. Volunteering or donating to charity can fill this need by making us feel like we are part of the solution. Sending financial aid to the victims of a tragedy, or to a charity helping those victims, appeases our emotional discomfort while also reinforcing our hope that, were the roles reversed, compassionate people would come to our aid in our desperate time of need.
The downside to this type of giving is that it is reactionary–impulsive. And when we are impulsive we make mistakes. We might donate to the first charity that asks. We might respond to a crowdfunding request on social media shared by a friend that purports to be raising money for individual victims. The very faith in humanity that drives much of our giving sadly puts us at risk of trusting too much. We want to believe that no one could stoop so low as to take advantage of our generosity in the wake of a tragedy. But people do.
With that said, we must take care to not fall victim to a different type of tragedy—the false dichotomy. It is not the case that because we cannot trust everyone that we should not trust anyone. And it is not the case that because we should not give impulsively that we should not give at all. In fact, CharityWatch proposes that we should consider the very act of giving more thoughtfully to be an essential part of our gifts. You will accomplish more with your donation by giving $100 to a legitimate and highly efficient charity than you will by giving $1,000 to a fraudulent or highly inefficient one. But you must educate yourself on how to do it. Think of the time you take to give more thoughtfully as part of your gift.
(1) Keep Your Emotions in Check: Emotions are not intrinsically good or bad. It is how we wield them in the world that determines whether they act as an asset or a hinderance. Allow your compassion for people or animals, sadness in the wake of a tragedy, or anger at injustice, function as catalysts for giving rather than as ends unto themselves. Then, take pause, and use your mind to make good decisions about how much to give, and to whom to direct your donations.
(2) Don't Make Millionaires Out of Disaster Victims: OK. Millionaires is a bit hyperbolic. The point here is that we do not want to collectively flood one victim or a small handful of victims with a large volume of donations while other victims go without. A victim who is interviewed on tv or whose story goes viral online may be bombarded with sometimes hundreds of thousands of dollars in donations, while other victims of the exact same tragedy receive nothing due to their individual stories not being publicized. Instead, identify a charity that is efficiently distributing aid to victims so that all those affected will have a better chance of receiving the help they need.
(3) Avoid Gift Tax: Giving directly to individual victims of a tragedy rather than through a charity is not tax deductible and, in fact, may cause your taxes to go up. Donations valued at more than $15,000 may be subject to Gift Tax under IRS rules. (Note: The IRS's ceiling for Gift Tax is adjusted annually, so visit www.irs.gov for current limits.) If you are a particularly fortunate and generous person with the means to make large donations, avoid Gift Tax by donating to a qualified charity rather than sending large gifts directly to individual victims.
(4) Take a Tax Deduction: Whether or not any given donor can take a tax deduction is based on that donor's specific tax situation, such as ability to itemize rather than take the standard deduction; total adjusted gross income relative to the amount of donations made in a given tax year; and other factors. If you are eligible to take a tax deduction for your charitable contributions, be sure to direct them to charities that have the ability to accept them since minimizing your taxes frees up more funds for you to donate. Generally, nonprofits in good standing with the IRS that are organized as 501(c)(3) public charities under the tax code will state that your “donation is tax deductible as permitted by law.” Confirm this directly by using the IRS's online tool. Donations to other types of non-profits, such as 501(c)4 organizations, are generally not tax-deductible.
(5) Know When Enough is Enough: Just as we shouldn't flood individuals with more donations than they need, this same logic applies to charities. A charity may use a disaster as an opportunity to raise funds for its other charitable programs even after it has surpassed the amount it can reasonably use to aid victims of a specific tragedy. This is ok, provided the charity makes donors aware of how their donations may be used. But donors who feel strongly about wanting to provide aid for the victims of a specific tragedy should pinpoint a charity that has not already raised more than it can reasonably spend for this purpose. Charities often post fundraising goals on their websites so that donors can see how much remains to be raised for a specific disaster.
(6) Don't Give to the First Charity That Asks: The first crowdfunding request, email, or targeted online ad you see from a charity requesting funds to aid victims of a tragedy is not automatically the most deserving of your donation just because it happens to be the first one you noticed. Put in at least as much effort into selecting a good charity as you would into selecting pizza toppings. Visit a charity's website to learn about the types of aid it is providing, and seek out third-party sources that can tell you how efficiently it is operating.
(7) Support Charities That Are Already Invested: Particularly after natural disasters, charities with no expertise or experience in providing disaster aid come out of the woodwork to take advantage of the generosity of vulnerable donors. Even well-meaning charities may end up siphoning donations away from those that are more experienced, skilled, and staffed for the task at hand. Give to charities that know what they are doing in a crisis and have existing infrastructure in place to more efficiently and effectively distribute emergency aid to victims.
(8) Donate After The Dust Has Settled: Victims need emergency assistance after a disaster. Insofar as donations for urgent aid are lagging, by all means, donate sooner rather than later. However, victims have longer term needs as well. If you did not donate quickly in response to a particular tragedy but still want to help, pinpoint a charity that is working on longer term needs. In the short term, victims of a disaster may need tents, blankets, bottled water, and food. In the longer term they may need things like desalination equipment, micro-lending, safe transportation routes, and education funding. It is never too late to help. Pinpoint an unmet need and donate.
(9) Donate to One Charity, Not Many: It is better to direct your donations to one or two charities rather than sending smaller donations to a long list of them. Even the most highly efficient charities have fundraising as well as overhead costs related to obtaining and processing your donation. This overhead eats into your donation. By making a larger gift to a single, financially efficient charity, rather than sending $20 to ten different charities, a smaller portion of your donation will be used to cover overhead costs.
(10) Send Cash, Not Stuff: The more cautious among us may decide to donate stuff to a charity rather than cash, thinking that doing so ensures our donations will not be diverted away from helping victims. Unfortunately, donating stuff often creates more costs, as well as logistical and distribution headaches for aid workers on the ground. Collecting non-cash donations from individuals, arranging for their transportation, sorting through them once they arrive at their destination, and distributing the right items to the right people, almost always costs a charity more money than if the charity had simply purchased the most needed items in bulk. Charities often receive truckloads of non-cash items, such as bottled water, directly from companies, which they can transport and distribute more efficiently than piece-meal donations from individuals. Visit a charity's web site to see if it is requesting specific items. If not, identify a financially efficient charity and donate cash.
Tragedies are painful reminders that life is unpredictable, is frequently unjust, and that terrible things can happen to good people. But they are also opportunities for us to work together to solve problems, to exercise compassion, to gain perspective, and to cultivate mindfulness about suffering in the world. It is never too late to change your giving habits, to give more generously, and to make giving thoughtfully an essential part of how you give.