Giving back: making wise decisions for your charitable donations.

Americans donated an estimated $240.72 billion in charitable contributions last year, according to Giving USA 2003. a publication researched and written by the Center an Philanthropy at Indiana University. In fact, researchers found that over the last 20 years, individual's charitable giving has equaled close to 2% of his or her personal income.

For African Americans, giving has always been paramount, whether in time, money, or talent. Reports show that middle class blacks earning between $30,000 and $50,000 give an average of $528 annually, compared with $462 donated by their white counterparts. "Besides the fact that giving is an innate part of who I am. I realize that it's good business," says S. Jenell Trigg, law counsel at Leventhal, Senter & Lerman, about her average donations of $2,500 distributed to at least five charities every year, including her church, alma maters, civil rights organizations, and sorority. "These organizations have helped me through grants and other financial assistance. They are the reason I have made it."

Giving is not only for the rich. But before you fork over a dime, put your detective hat on. Here are some ways from the Better Business Bureau and the American Institute of Philanthropy to determine the legitimacy of an organization, how it spends your money, and what you can expect for your charitable dollars.

Once you've read the tips below, contact the National Center for Black Philanthropy (www.ncfbp.net; 202-530-9770) and order the BBB's Wise, Giving Guide (www.give.org; 703-276-0100), which provides information about popular charities.

KNOW THE CHARITY. Find out if the charity engages in activities that are consistent with your own beliefs. If you don't know anything about the charity, ask. Request written literature including brochures and the most recent company report. Also try the Twenty-First Century Foundation (www.21cf.org), a nonprofit organization that supports black causes.

FIND OUT WHERE YOUR DOLLARS GO. Simply stated, "How will you spend my money?" The BBB Wise Giving Alliance Standards for Charity Accountability require charities to spend at least 65% of their total expenses on program activities and 35% or less on fundraising. Charities that do less are not necessarily bad, but the above guide will help you decide if they are on track.

CHECK THE LICENSING. Registration or licensing of a charity is mandatory in many states, However, licensing is not an endorsement. One resource for researching charitable organizations is Guidestar (www.guidestar.org), a national database of nonprofit information, including Form 990--tax exempt organizations with income of more than $25,000 must file this form annually with the IRS--and a tutorial to understanding the document. (Note: Religious organizations are not required to file this form.)

KEEP ALL RECORDS OF YOUR DONATIONS. So that you can account for your charitable giving, keep receipts, canceled checks, and bank statements. You can also deduct out-of pocket expenses such as transportation costs related to your volunteer service to a charity. Also, never donate cash; it's much easier to track a check than cash.

DON'T MISS THE TAX BENEFIT. Everyone should take full advantage of the available tax benefits as long as they don't exceed 50% of your adjusted gross income. Also, the terms "tax exempt" and "tax deductible" are not interchangeable. Tax exempt means the organization pays no taxes. Tax deductible indicates that the donor can deduct contributions on his or her federal income tax return, Check with the IRS about an organization's tax-exempt status under section 501(c)(3) of the tax code by calling 877-829-5500 or log on to www.irs.gov.

2003
CONTRIBUTIONS
BY SOURCE OF CONTRIBUTION
(IN BILLIONS)

INDIVIDUALS    $179.36 / 74.5%
CORPORATIONS    $13.46 / 5.6%
FOUNDATIONS     $26.30 / 10.9%
BEQUESTS        $21.60 / 9.0%

SOURCE: GIVING USA
FOUNDATION-AAFRC TRUST FOR
PHILANTHROPY/GIVING USA 2004

Note: Table made from pie chart.