How to Choose a Charity for Holiday Giving

Being generous is great, but being smart can make those dollars go further.

A young boy makes a donation into a Salvation Army kettle outside a Giant grocery store in Clifton, Va., Nov. 24, 2012.
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"It's very common [that] a minimum of 50 percent of the food that someone will collect in a food drive are food donations that we cannot give out in our pantry," she says.

4. Consider what your skills are worth: A lawyer or a web designer might feel fulfilled ladling bowls of soup, but in labor market terms, she also has much more valuable skills. Many organizations require high-cost skills that they may not be able to afford, Miniutti says, like attorneys to look over and negotiate contracts with vendors. Likewise, doctors working pro bono can be very helpful for organizations helping people who cannot afford healthcare.

5. Think about value, not dollars: That doesn't mean everyone should give as much money as possible to every charity, no matter what. It does mean, however, that cheaper isn't necessarily better.

"Low-cost is not the same as cost-effectiveness. For example, the cost part is meaningless unless you have any sense that what you're paying for is actually making any difference," says Rosqueta of the Center for High Impact Philanthropy. For example, one charity might have a $20 suggested donation, while another place might suggest $50.

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"If the $50 organization is actually making a bigger difference in the lives of the people you want to help, and the $20 one, there's no indication that they're making any difference, the $50 is more cost effective, even though it's a higher cost," she says. "Cost effectiveness matters once you understand that the nonprofit is actually making a difference."

6. Do the math (but don't get hung up on it): More often than not, Miniutti says, phone solicitors asking for donations work for for-profit firms, not the charity organizations themselves. That means that a cut of a donor's money will go to that firm.

But there is a flip side to that kind of thinking: Rosqueta points out that it's a mistake to get hung up on what percentage of a donation goes toward what kind of work, especially without considering how much good is actually done.

"It's focusing entirely on input without understanding what's the result of it," she says. "It would be like choosing a chicken soup based on the amount of chicken stock that went in."

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  • Danielle Kurtzleben is a business and economics reporter for U.S. News & World Report. Connect with her on Twitter @titonka or via E-mail at dkurtzleben@usnews.com.