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The bulk of the nation's largess--35 percent--goes to religious institutions, followed by education, which nets 13 percent of our generosity. We give not just of our money but also of our time. Nearly half of the adult population, about 84 million people, volunteers to feed the hungry, coach the kids, and comfort the sick.

These are figures to be proud of, to be sure. But you're about to be asked for even more. The number of nonprofits nationwide is now a staggering 1.6 million. That's more than the entire population of Idaho and a 60 percent increase in the past decade alone. But while the nonprofit count is up, state budgets--on which many charities, especially those serving the needy, rely for grants--are down. Some experts predict state shortfalls will reach $80 billion next year, piling still more tasks on already stretched social-service organizations (related story). And though Americans gave a bit more last year than in 2001, the rate of giving remained where it's been for years, at about 2 percent of the nation's gross domestic product. "There's more competition for the charitable dollar," says Bennett Weiner, chief operating officer of the Better Business Bureau's Wise Giving Alliance.

Urgent plea. And that means more "give now!" appeals in the mailbox and more fundraising calls, as charities desperately try to distinguish themselves from their do-good brethren. "We know you're being bombarded by more groups than ever," says William Swindell, associate executive director of development for Father Flanagan's Girls and Boys Town in Boys Town, Neb. "We want to be on your short list." To that end, his group is mounting a campaign to thank longtime donors--even folks who've given $100 annually for years can expect a call--and using lures like discounted tickets to black-tie galas to get the next generation hooked on giving.

Compounding charities' scramble for donors is the looming promise of an economic turnaround. There will be "a more intense solicitation during this holiday period," says Eugene Tempel, executive director of the Center on Philanthropy at Indiana University. "An economic pickup enhances the prospect that donors might respond."

With more solicitations, of course, come greater chances of chicanery. It's a singular conundrum--even as Americans' generosity has grown, our faith in nonprofits has sunk. Widespread disappointment with the handling of September 11-related donations and a spate of recent scandals involving nonprofits--from overpaid trustees to outright embezzlement--have hammered home the point that the money and trust we place in charities can easily be abused (related story). In August 2002, the Brookings Institution found that 16 percent of Americans had no confidence in charitable institutions, up from half that in July 2001. "There is no SEC for nonprofits," says Daniel Borochoff, president of the watchdog group American Institute of Philanthropy.

But for every rotten apple in the nonprofit barrel, there are many more that uphold high standards. The problem, especially with so many groups angling for assistance, is picking one. A BBB study found, in fact, that 70 percent of donors have trouble determining a charity's legitimacy. Add to that the vast array of giving options--Do you want to give your money? Your time? Your car?--and the task can seem overwhelming.

It's likely you already know which religious or educational institution will get your gift. Making other giving decisions can be tough, but the effort is worthwhile. "Donation is an investment in your community and your world, and you don't want it wasted," says Tracy Thorleifson, a lawyer with the Federal Trade Commission. And what a rare treat: Charitable giving, whether of $1 or $1 million, gives each of us a chance to affect the greater good. U.S. News talked to philanthropic experts for advice on ensuring that your charitable investments are sound.