There are times in our lives when we particularly want to step up and make a charitable contribution. Sometimes we are motivated by a national or world event. Sometimes we want to make a memorial donation on behalf of a friend or loved one, or we do it out of gratitude to an honored institution. Or perhaps we simply chose to do it as a planned part of our financial program. Whatever the reason, it makes sense to chose our beneficiary wisely, to know where and how the gift will be used, and that where appropriate, we are able to reap certain tax benefits. Some suggestions to help in that process:

Do your homework

The Internet can be a great resource for researching would-be beneficiaries. Most major charities have Web sites where you can gather information about their activities. In many cases you can even learn where and how their monies are spent. It’s recommended that you try to find organizations in which 60 percent or more of your charitable donation goes to program services. Less than 40 percent should be spent on general administration and fund-raising costs. However, those ratios may be tougher to meet for newer groups and those working on less popular issues. They may have to spend a greater percentage on fund raising and administrative costs than well-established, popular groups. If your intended charity has high costs for “public education,” give it close scrutiny. This is sometimes done to mask direct mail and telemarketing costs, which are actually fund-raising expenses.

Where to go?

There are watchdog agencies that can help you keep from being scammed by unscrupulous organizations. The National Charities Information Bureau (NCIB) at www.give.org/reports/ has data on a wide variety of not-for-profits. The NCIB has been around since 1918 and is what amounts to the charity watchdog arm of the Better Business Bureau. This site can tell you what does and does not constitute a charity, and can provide news, tips, articles and frequently asked questions about charities in general. For a fee, NCIB can also provide you a detailed report on scores of national and international charities. The reports include information on many charities’ primary sources of funding, their fund-raising expense ratio, executive salaries, and more.

Know your charity

Charities have an obligation to provide detailed information to interested donors. Never give to a charity you know nothing about. Request written literature and a copy of the charity’s latest annual report. This should include a list of the board of directors, a mission statement and the most recently available audited financial statements. If a charity does not provide you with the information you request, you may want to think twice about giving to it. Honest charities typically encourage your interest and respond to your questions. Don’t donate to an organization that tries to pressure you or requires that you make your donation before it will release information.

Next week: the importance of your charity’s tax status, creative giving and more.

Marc A. Pellerin is an associate vice president and investment advisor with Advest Inc. in Lewiston.