Holiday giving: Who do you trust with your gift?

This time of year, your mailbox is probably filled with solicitations from charitable organizations asking for donations - not to mention that steady parade of phone calls and emails. And then there's the newest kid on the block - social networking sites like Facebook, Myspace and LinkedIn where friends ask you to support their favorite causes.

The number of requests can be overwhelming. Certainly, the needs are great. How do you decide where to invest your finite charitable dollars?

It's important to recognize that while the needs are seemingly infinite, your personal resources are not. So ask yourself - what is most important to me? There are likely a select few issues that are meaningful to you.

Once you've targeted the causes that matter to you as a donor, you owe it to yourself to make sure your charitable dollars will have the desired impact.

Charities that value the public trust have high degrees of transparency. Check out their websites - if you don't find information like annual reports, tax returns and audited financial statements there, you may want to delve further before writing that check.

Check out the charity you're considering on Guidestar.org. Contact their Executive Director and get concrete answers to your questions if you haven't found the information you're looking for. Organizations whose finances are audited annually by an outside firm, whose IRS form 990 tax returns are available, and who can easily demonstrate the percentage of their revenue spent on overhead will be happy to speak with you. Beware of evasive answers and unsubstantiated claims.

Nonprofit organizations are businesses like any other - they must cover costs of the business they conduct, including paying staff, insurance coverage, employee benefits, licenses, and mortgages - but any profit above cost is reinvested into services, rather than being distributed to investors.

If a charity tells you they don't spend money on these items, in order to provide more meals, shelter nights, or education, look out - this may mean they aren't doing business in a way that ensures the ultimate safety of their clients or sustainability of their agency. And you, as a donor, don't want to throw your money into a sinking ship. 

Give generously this holiday season - with the peace of mind that comes from knowing your donations will be well-spent.