As 2017 comes to a close and metro Detroiters prepare to make end-of-year charitable donations, DBusiness Daily News spoke with Anthony McCree, managing partner of Detroit-based George Johnson and Co., an accounting firm that specializes in charitable giving, about how to make donations count.
1. DDN: What goes into selecting a reputable charity to donate to?
AM: First, it’s about finding a charity that has a mission or a goal that lines up with what your personal wishes are. Whether it be charities that have programs that support early childhood education or things of that nature. Really finding an organization that has a mission that lines with what your wishes are. I have lots of nonprofits that I support and the firm supports that are in the community. One of them is the Detroit Police Athletic League (PAL). Their primary purpose is to build character in young people, and they do that with sports and team programs.
2. DDN: Are there any red flags people should be aware of?
AM: There are resources that you can use to evaluate nonprofits and where the money actually goes. GuideStar is one resource where you can easily get information on any nonprofit that’s registered as a 501(c)(3). You can get any information on their financial health, what percentage of their dollars actually go to program expenses as opposed to managing expenses or fundraising expenses. I would look for an organization where 75 percent is really the goal they should be shooting for, meaning 75 percent or more of their dollars are actually going to program expenses (rather than administrative expenses).
3. DDN: What are some characteristics of reputable nonprofits?
AM: The first step is they’re properly registered as a 501(c)(3) and they have tax exempt status, so your donations will be tax deductible. The more transparent organizations are with their outcomes, the better. It’s one thing to have a goal or a mission to do a certain thing, but how are you actually measuring up? The good ones should have some information on their outcomes, either the people they serve or where they focus in on, and how the dollars actually impact their lives. For instance, I mentioned Detroit PAL, they talk about how they serve 15,000 kids but they also have information on being involved in PAL Organization Sports, and how that demographic differs from the ones that don’t get involved. You know, higher percentage of high school graduates and college enrollees, etc. So, look at the outcomes, look at the results.
4: DDN: What’s the incentive to donating by the end of the year?
AM: Well the incentive would be you would be able to get a tax deduction in this calendar year. So when you file your tax returns for the year 2017, you would be able to deduct that donation on your return. If you did it after the end of the year, you would just have to wait for the following year to deduct it. If you donate before the end of the year, the respective organization would be able to use those dollars sooner, so that’s another incentive.
5. DDN: Anything else people should know before donating?
AM: Just that making a decision to pick an organization and making a donation is really important. I would advise individuals to take the time to do the research, ask question of the organization, how they spend money, etc. Even though the end of the year is coming up, don’t feel like you have to rush, take the time to do the research.