Making sure your donations reach the right people

When donating, investigate the charity’s ethical principles and transparency guidelines.  

By Camila Lewandowski 

Choosing a charitable organization to support financially can sometimes be tricky, whether it be for a one-time donation or a recurring contribution. 

Before giving money, it is important to check a charity’s legitimacy. Genuine charities follow a set of ethical principles and transparency guidelines that are safeguarded by the board of directors. Board members are elected by the organization’s beneficiaries and overlook that the charity fulfills its mission and does so ethically. 

Most charities have an ethics conduct code that they update regularly. The guidelines range from serving all beneficiaries no matter their nationality or sexual orientation to not using the charity’s resources for personal gain.  

Members of the public can also learn how their donations are used by attending the annual general assembly meeting where the charity’s leaders present a detailed budget showcasing both revenues and expenditures. 

This information is usually posted in the charity’s website and individuals can request the documents.  

Nonetheless, scammers have developed and perfectioned several techniques to lure caring individuals to donate to inexistent organizations.  

Whenever one of the situations below occur, take a few steps back. It is most likely a fraud. 

Always try to remain calm and coherent during these situations. Scammers tend to appeal to emotion and desperation. 

Another important sign to be on the lookout for is donation tax shelter schemes. These “too good to be true” deals consist of allowing the donor to receive a donation receipt for more than the amount they gave. 

Tax shelter schemes take advantage of charities, who issue donation receipts, for the individual financial gain of the promoters. When the Canadian Revenue Agency (CRA) notes these irregularities, donors and promoters must refund the donation tax as well as paying an additional interest. 

So before donating, think twice and make sure your money will reach the right people. Here are a few tips on how to donate wisely. 

Learn more about registered charities on the Canada Revenue Agency and CharityData websites.