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Donating money to charity: A beginner's guide

Donating money to charity or giving back to the community could help to solve some of the world's biggest problems. It makes the world a better place not only for the receiver, but also the giver.

Key takeaways from this article:

  • Ever heard the saying that it's better to give than to receive? Turns out there’s some science to back that up.
  • The 2022 World Happiness Report found there's a positive impact for the person doing the giving, because being generous makes you feel good too.
  • Charitable giving could help others to achieve their goals or improve their lives.

What's charitable giving?

Donating money to a charity – or any licensed non-profit organisation – is a popular way to give, but there are many more ways you can give back. Some people donate their time or skills or help out. You can also set up or take part in fundraising events. How much time or money you give is entirely up to you. It could be a little or a lot. The amount or frequency doesn’t really matter. Just getting involved or turning up is what makes a difference.

How does giving make the world a better place?

Charities are usually created to tackle big problems that exist in the community. They bring attention to issues and raise money to help fix problems, or to help people who are impacted.

Donating and fundraising also may help you get in touch with your community and give you a wider perspective on the world. You'll meet others and discover new things.

It’s a great way to bring people together, and it can be fun!

Joining a fun run, for example, connects you to like-minded people. You already share at least two things in common, supporting charity and running.

How to choose a charity

According to the Australian Charities and Not-for-profits Commission (ACNC), there are around 60,000 registered charities in Australia alone.

Across the world, there are thousands of charities that support children, the homeless or people affected by natural disasters. There are funds that feed the hungry, organisations that provide safe, clean drinking water in developing countries, and foundations that help prevent and find treatments for common or incurable diseases – just to name a few.

Think about your personal values

The choices are almost endless, but you’re more likely to stay motivated and feel good about giving if you donate to causes that are meaningful to you. If you care about animals, the environment, or homeless kids, find a charity related to those values.

Other ways you can make a difference

You may enjoy organising fundraising events, fetes and bake drives at your school. Australia’s Biggest Morning Tea is an event held annually to support the Cancer Council. Think about hosting one at your school.

Or get your friends and family members together to do a clean-up – a beach, waterway, park or any shared space – in your local area. You can register a project and get a kit to help with your efforts through Clean Up Australia.

If you like getting your hands dirty and planting trees, you could start your own Junior Landcare group. Projects like these make learning fun for all ages and make communities stronger.

There are also many charities that offer sponsorships for children in developing countries, such as The Smith Family and World Vision. You might want to talk with your family about sponsoring a child who deserves a better start in life and find ways you can all be involved in their life.

Legally speaking, sporting clubs are not charities, yet they still make a difference to our communities. You could volunteer your time at a club or sports centre, or with any other organisation you’re keen to support. Volunteering Australia has loads of information about becoming a volunteer and/or donating.

How to check out your charity

Do your research because you want to be sure your donation will make a positive impact. Not only are there scams out there, but some charitable organisations spend so much on administrative costs that only a very small amount of your money will make a difference.

First stop: your chosen charity’s website

Does it give you details about how it uses donations? How much of your money will go directly to fund the programs you care about? If you can’t find this information, be suspicious.

Do a thorough online search

Is the charity registered with the ACNC?

Dig deeper by searching a charity’s name with words like, ‘complaints’, ‘reviews’ and ‘scams’. Hopefully nothing will come up, but if there is bad news, it may be wise to choose another charity.

Decide your way to make financial donations

Ask for ID from anyone inviting you to donate

Whether it's in person, on social media or in an online forum, don't give out your bank account details to anyone before doing further checks.

That collector might tell a good story, but don't feel pressured if you're approached on the street or in any other public space. Be sure to ask for their ID or proof they are authorised to collect for the charity.

If someone calls asking for money

Make sure you write down the charity’s exact name, phone number and web address.

While you're there, ask the person on the phone (probably a paid fundraiser) how much of your money will go to the charity itself.

If you're working and paying tax, you could ask if your charitable donation can be counted as a tax deduction or not. In Australia, amounts of $2 or more may be fully tax deductible provided the organisation has qualified as deductible gift recipient.

Then, go online and find the organisation's phone number on their official website and call back yourself to double-check what you've been told.

Donating safety tips

If you are donating to a charity online, make sure the web page where you enter your payment information has ‘https’ in the web address.

This means your information is encrypted and transmitted securely. But encryption alone may not mean the charity is legit. Scammers know how to encrypt, too.

After donating, check your bank account to make sure you have been charged the amount you agreed to pay, and haven’t been signed up to pay more. If something looks amiss, notify the charity and the bank straightaway.

To sum up

Whether your style of giving back involves signing up for a fun run, sponsoring a child who deserves a better life or donating some of your savings to a worthy cause, your generosity will come with unexpected benefits – because studies show givers receive a sense of reward as an added bonus.

You want to be sure your donation makes a real difference so pick a charity that's meaningful to you, do your own research before making charitable donations and always discuss your plans to help with a parent or caregiver first.

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Things you should know
This information is general in nature and has been prepared without taking your objectives, needs and overall financial situation into account. For this reason, you should consider the appropriateness for the information to your own circumstances and, if necessary, seek appropriate professional advice.