The Best Way to Donate Money and Make an Impact

Choosing how and where to give can be a bit of a challenge; there are so many good options out there! Now that charitable giving has become more accessible and a wide variety of causes seem to present themselves all the time, how do you identify the best way to use your money to do the most good?

Here are tips and resources to ensure that you feel confident in your donation choices. 

Step 1: Deciding where you want to donate 

First, determine what general cause or issue area you’d like to support. Remember that this is the cause you want to donate to now, but there’s no commitment to continue giving to this particular issue area in the future. It’s okay if there are 10 different organizations you’d like to donate to and only currently have the means to give to one.

Ask yourself what speaks to you at this moment, or what need seems most urgent. Perhaps a natural disaster or catastrophic event has occurred, and you feel compelled to support the victims. Or maybe you’ve determined that you don’t have the resources to adopt a pet, but you want to do what you can to help homeless animals. Whatever your reasoning, it’s sound—and it’s okay if you donate to a different organization or issue area next time. 

Once you have this narrowed down, there will still be plenty of organizations for you to choose from. 

Pro Tip: If you decide to go the in-kind donation route, be sure to find out what is (and isn’t) needed before you give.

Step 2: Do your research 

If you haven’t found an organization that speaks to you, Effective Altruism recommends looking for donation opportunities that meet three criteria: large in scale, neglected enough to warrant your attention, and extremely solvable (meaning resources directed at the cause will have tangible impact). An important thing to remember is that unless the group is fraudulent or mismanages their funds, there isn’t really a “wrong” answer. 

There are plenty of online resources to research donation options, and sites like Global Citizen offer multiple areas of focus via one organization. Many resources, such as Charity Navigator, offer tips for informed giving in addition to their index of organizations. Don’t forget to check out the organizations listed on Idealist, which can be filtered by issue area, location, and more. 

Step 3: Keep an eye out for scams  

Unfortunately, the same crises or inequalities that compel many of us to want to donate can also create opportunities for dishonesty. 

When in doubt, follow the money and use tools like Candid or Guidestar. Included organizations are required to have tax exempt status, and the list gives detailed financial information as well as graphical data on the work each organization does. Give.org is run by the Better Business Bureau and provides valuable insight to help you give wisely. 

If you’re having trouble verifying a charity you’re excited about, contact them directly and ask for information about their nonprofit status and how their money is used. This Idealist guide to the Form 990 is also particularly helpful to check financials. It’s not uncharitable to be curious about how your donation will be used and to hold out until you have enough information to feel comfortable. 

Pro tip: If you’re considering donating to a cause that is not a registered nonprofit such as a crowdfunding campaign or personal charity, do your research and be aware that you may not have access to much transparency (or tax benefits). 

Step 4: Maximize your impact on a budget 

Here are some suggestions for how to be an informed donor and make the biggest impact. 

• Donation matching. Find out if your employer matches donations, and if their matching is restricted to certain organizations. 
• Seasonal giving. Keep an eye out for specific opportunities like Giving Tuesday along with other times or promotional periods when donations can be doubled or tripled. 
• Intermediary giving. Consider donating to a program like the Maximum Impact Fund run by GiveWell. They research where your money can go the furthest and let you know how it was used. You can also find similar funds for specific areas of interest. 
• Donor advised funds. This approach to giving has grown in popularity and can make philanthropy more accessible and tax-effective. 
• Automated gifts. If you’d like to support an organization continuously or don’t have a large amount to give them at once, set up a monthly gift in an amount with which you feel comfortable—even a tiny one—and let them draw the money out. You don’t have to remember to donate or worry about your bank account, and they’ll be able to plan on your support. 
• Centralized giving. While giving in smaller amounts is fine (see above), it can be more impactful to prioritize an organization and give them a larger sum, rather than splitting it among multiple charities that work toward a similar cause 
• Watch your budget. It can be tempting to donate more than you should when a cause presents itself. Ask yourself each month or quarter how much you can reasonably give so you don’t burn out your funds or have to take an extended break from donating at all. 

If you do your due diligence, whatever amount you can afford to give will add to the good in the world. Give wisely!