How to give charity donations safely

How to give charity donations safely
Thursday 8 September 2016
If you want to give back to the society you are a part of, there’s no better way than to donate money to an NGO doing social work at a grassroot level. The amount you donate need not be very huge. It can be something as reasonable as INR 1000 a month or INR 12000 one-time. When donated to a right organisation like Save the Children (which is engaged in driving a change in the lives of underprivileged children in India), it goes a long way in improving someone’s life.

Every time you donate to charity, does it make the same impact? Does every rupee donated have the same net result? Also, if you’re donating to earn rebate in income tax, you need to be sure that the organisation you support is eligible to provide tax-exemption certificate. There are certain things you need to keep in mind while supporting an NGO monetarily so that your philanthropic actions yield the desired results. Below we discuss some very important points you need to keep in mind while making donations :
 
1. If you donate money for tax purposes, be aware
While considering making a financial contribution to a charitable organisation, you need to ensure that it is registered with the Indian government and has the necessary certifications for providing tax exemption to its donors. Section 80G of the Income Tax Act offers tax rebates for donations to charitable organisations, and this can be claimed while filing the ITR (Income Tax Return).
 
At the same time, the NGO should also be formally registered under the Societies Registration Act 1860 (or under any other corresponding law). Here are some other caveats which should be followed by an NGO to be qualified for awarding tax benefits to their donors:
i. They must not have any source of income not exempted, including business income.
ii. The NGO's objectives or bylaws must not specify spending income or assets if they don’t seek to support charities or humanitarian causes
Iii. They should not discriminate their spending on the basis of  religious community or caste.
iv. Further, the NGO must maintain accounts of receipts,  expenditures and overall income.
 
It should also be noted here than only monetary contributions qualify for tax deductions and donations made in kind are not eligible for the same.
 
2. Check for accountability and transparency
Any NGO doing real work for deprived communities will not shy away from being extremely open and transparent about their management, staff, practices and even their financials. They are also open to any form of public scrutiny. In fact, a lot of this information should already be available in the organisation’s annual report. In the name of NGOs, several sham organisations exist. Before pledging your support to an NGO, make sure you check all the details about it. Scan their website, social media presence, ongoing campaigns, contact information, on-ground work, financial details, tax status and other relevant features and then decide the NGO you want to give your money to. Always commit your money to someone as reliable and trusted as Save the Children, for only then your contribution will make any sense.
 
Conclusion
If you want to make a difference in the lives of people with limited means, go ahead and donate to an NGO which is doing some truly powerful work to help underprivileged communities improve their living status. The best NGO which deserves your donation is Save the Children. It is one organisation which is known for its high level of transparency and has path-breaking projects running in 18 states of India to improve children’s lives. More than lakh donors across India and overseas have invested their trust in Save the Children’s work for children.